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Float

• The difference between the credits given by the Fed to banks' reserve accounts on checks being cleared through the Fed and the debits made to banks' reserve accounts on the same checks. Float is always positive, because in the clearing of a check, the credit sometimes precedes the debit. Float adds to the money supply.

• Funds that have been sent by the payer but are not yet usable funds to the payee.

• The total number of outstanding shares available on the market.

• The number of shares that are actively tradable in the market, excluding shares that are held by officers and major stakeholders that have agreements not to sell until someone else is offered the stock.

 
 Embedded terms in definition
 Clearing
Credit
Fed
Held
Market
Money supply
Outstanding shares
Payer
Reserve
Sell
Shares
Stock
 
 Referenced Terms
 Ach automated clearinghouse credits: Deposits of payroll directly into the payees' (employees') accounts. Sacrifices disbursement Float but may generate goodwill for the employer.

 Automated clearing house: Abbreviated ACH. A collection of 32 regional electronic interbank networks used to process transactions electronically with a guaranteed one-day bank collection Float.

 Collection float: The negative Float that is created between the time when you deposit a check in your account and the time when funds are made available.The delay between the time when a payer or customer deducts a payment from its checking account ledger and the time when the payee or vendor actually receives the funds in a spendable form.

 Concentration banking: A collection procedure in which payments are made to regionally dispersed collection centers, then deposited in local banks for quick clearing. Reduces collection Float by shortening mail and clearing float.

 Controlled disbursing: The strategic use of mailing points and bank accounts to lengthen mail Float and clearing float, respectively.

 
 Related Terms
 

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