Have you ever wondered why many online banking interfaces, including PerkStreet’s, display two different balances, “Available” and “Current?”

These two balances are meant to give you a clear understanding of your financial situation.

This has to do with the time it takes for transactions to fully process.

While the fact that things are not completely instant when it comes to online banking can seem confusing at first, if you think about all the moving parts, the time it takes will surely make sense.

Imagine a hypothetical card purchase:

Let’s say you and your family go to a restaurant and get a $100 meal. (Another PerkStreet Family comes too? PerkPals!) The restaurant initiates a preauthorization when you hand them the card, making sure you have enough money to cover the tab. But then, you tip the waiter an extra $20 at the end of the meal, so the restaurant has to process the full transaction later. After that, your bank has to process the transaction on their end and verify that all funds have cleared before deducting the cost from your balance. As you can see, this takes time.

Current Balance and Available Balance both exist in an effort to give our customers the clearest, most accurate picture possible when it comes to their accounts given the fact that transactions are not instant. Here’s how these two balances are defined, what they reflect, and why they may be different.

Available Balance

Your Available Balance reflects all account activity. This means your Available Balance reflects pending transactions in addition to those that have already settled. This balance is designed to tell you how much money you can safely spend without over-drafting your account. Since transactions can take time to process, the number reflected in your Available Balance tells you how much money you would have if everything pending settles without changing. One thing to keep in mind about your Available Balance is that it does not reflect bill-pays you have scheduled or other payments that have not yet hit our system, such as outstanding checks. Your Available Balance can be found in your online banking interface under the “Accounts Overview” section.

Current Balance

Your Current Balance can also be described as the “actual balance” of your account in the moment you’re looking at it, because it only reflects transactions that have been processed and are fully settled. So Current Balance does not factor in pending transactions, but rather indicates the exact amount in your account at the current time. Your Current Balance includes all settled account activity except anything processed on the current day. This balance is found in your online banking interface under the “Accounts Overview” section.

Going back to our initial hypothetical…

Let’s say you and your family go out to dinner and pay using your PerkStreet Financial Debit MasterCard®. The merchant swipes your card and initiates a preauthorization on your account. This swipe ensures you have the necessary funds in your account to cover the bill. The funds are then put on a hold (a pending transaction), until the merchant submits total cost with tip.

That hold is reflected immediately in your Available Balance.

As soon as the bank transfers the final amount of the bill to the merchant and verifies the payment, the transaction is “settled.”

Only then is the purchase reflected in both your Available Balance and your Current Balance.

This whole process can take several days to complete.

I hope this quick post helps you understand your PerkStreet account a little better. As always, if you ever have any questions or feedback, please shoot me a note at help (at) perkstreet.com.

Keep on Perkin’

-Brendan

Brendan Carroll
PerkStreet Financial