Account Balance vs Available Balance
Although they sound similar to each other, there is a difference between account balance and available balance. Available balance directly affects the cash deposits or withdrawals, but the account balance in the bank account takes time to update the changes, either cash increases for the deposits or cash reduces for the withdrawals. This article describes the meaning of account balance and available balance in the accounts and the difference between account balance and available balance, in detail.
What is Account Balance?
Account balance indicates the total current balance that exists either in the corporate account or the personal account in a particular period. The current balance gets updated at the close of bank business each day, and it remains same until the time of closing the bank on the following day. As a result when purchasing goods or making deposits or withdrawals using a debit card, the account balance would not be updated immediately. It will be updated in the bank accounting system on the following day.
What is Available Balance?
The available balance in the bank account indicates the amount of funds that is available in the account at the time of accessing it. That means, when a transaction is made either by using a debit card or making deposits or withdrawals through ATM machines, it will immediately get updated and indicate as the available balance in bank account.
When considering about the amounts indicated in the account balance and the available balance, there are some instances where these two values are not equal, which means that the account balance is more than the available balance. This is mainly due to the fact that the account balance is updated once in a day in a particular period after all the bank businesses are closed. However, the available balance immediately gets updated at the time of the transactions.Even if the person does not make any purchases, sometimes there can be differences between these two account balances, as a result ofcash withdrawals for presented cheques.
Sometimes the difference may raise confusions for the customers and also there is a higher chance for errors to occur when adding and deducting the figures through accounting systems. If the purchases are made overnight or failures of merchants to claim for the purchases from the customers’ accounts may negatively impact on the account balances.There are some rare situations, where the claims may get delayed and accounts have been overdrawn. Therefore, it is always safe to keep all the accounting records for the future references with the bank statements.
What is the difference between Account Balance and Available Balance?
In conclusion, it can be said that the available balance in the bank account indicates the exact amount that is in the account at the time of the customer inquiry. However, the account balance gets updated during a specific period of the day, therefore, there may be occasions where the account balance is not tallied with the available balance.
Photos By: Simon Cunningham via Flickr (CC BY 2.0), Sergio Ortega (CC BY- SA 3.0)
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