In investment terms, a float is the number of outstanding shares a corporation has available for trading.
If there is a small float, stock prices tend to be volatile, since one large trade could significantly affect the availability and therefore the price of these stocks. If there is a large float, stock prices tend to be more stable.
In banking, the float refers to the time lag between your depositing a check in the bank and the day the funds become available for use. For example, if you deposit a check on Monday, and you can withdraw the cash on Friday, the float is four days and works to the bank's advantage.
Float is also the period that elapses from the time you write a check until it clears your account, which can work to your advantage. However, as checks are increasingly cleared electronically at the point of deposit, this float is disappearing.
In a credit account, float is the amount of time between the date you charge a purchase and the date the payment is due. If you have paid your previous bill in full and on time, you don't owe a finance charge on the amount of the purchase during the float.
1) The amount of uncollected funds represented by checks in the possession of one bank but drawn on other credit unions and banks. 2) The time that elapses between the day a check is deposited and the day it is presented for payment to the financial institution on which it is drawn.
- Browse Related Terms: Availability date, Availability policy, Cut-off time, Deposit slip, Derogatory Information, Disclosures (Deposit), Escrow Analysis, Exception Hold, Float, Inactive Account, Uncollected funds
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