bank ledger balance vs available balance

Ledger Balance Vs Available Balance: Any individual would execute multiple bank transactions in a day and with the passage of time, these bank transactions become more complex. Thus to identify these transactions, the bank officials will use different terms/names to classify balances. There are basically two types of balances shown after the execution of any transaction and they are Ledger balance and Available Balance. Let us understand what is Ledger balance and Available balance in detail in the section below.

What Is the Difference Between Ledger Balance And Available Balance?

The difference between Ledger balance and Available balance is given below:

Ledger Balance Means	Available Balance Means
A ledger balance is otherwise called an Account balance. Ledger balance represents the existing bank balance that was available in your bank account before the start of the business day.	Available balance is the balance amount that exists in your bank account which is available to withdraw. Any individual will be able to withdraw, transfer or use the funds in the available balance. Available balance is the balance that reflects the moment any transaction is performed in your bank account.

Ledger Balance Vs Available Balance Example

Look at the image given below.

• If you see the ledger balance is Rs.14,495.
• This means on the beginning of the business day the balance was Rs.14,495.
•  Now the individual has performed a transaction by withdrawing Rs.1300.
• So now the available balance is calculated by deducting Rs.1300 from 14,495. This means the available balance is Rs.13,195. 

Case 2: Ledger Balance And Available Balance

• In the above transaction, the available balance will become a ledger balance if the individual doesn’t perform any financial operation after the withdrawal of the money.
• However, if the individual again performs a financial activity by withdrawing 2000 from the same bank account, the available balance would change into Rs. 11,195. (which was earlier Rs.13,195).

Ledger Balance Higher Than Available Balance

1. The ledger balance will be higher than the available balance when you have performed the transactions that were less than the Ledger balance.
2. For example, if your ledger balance was Rs.5000 and you have withdrawn, paid bills or transacted only which is of only Rs.3000, then the available balance would be Rs.2000 and the ledger balance would remain Rs.5000 till the end of the business day.

Ledger Balance Less Than Available Balance

1. The Ledger balance will be more than the available balance when some deposits money to your bank account or transacts money to your bank account.
2. For example, if you have deposited a cheque to your bank account on the last day and if the money was transferred to your account on the current day, then the available balance would be more than the ledger balance.

FAQs On Ledger Balance Vs Available Balance

The frequently asked questions on Ledger Balance and Available Balance are given below:

Q. What does ledger balance mean and How is ledger balance calculated?
A. Ledger balance indicates the funds that actually your bank account has before the beginning of the business day. Ledger balance gets updated by the end of the business day as soon all the transactions such as deposits, funds received, withdrawal, credit/debit transactions are completed or accepted. Ledger balance reflects/changes by the end of the business day.

Q. Can we withdraw money from the ledger balance?
A. Yes, any individual can withdraw the money from the ledger balance. But before withdrawing the money from the Ledger balance, the individual must check out the available balance. Example: If the ledger balance is Rs.5000 and the available balance is Rs.3000, then the individual will be able to withdraw only Rs.3000.

Q. What is the available and ledger balance?
A. Available balance is the balance which any individual can spend and a ledger balance is a balance that indicates the balance that was available at the beginning of the business day. 

Q. Why is the available balance higher than the current balance?
A. If your bank account has accepted any transactions, then the available balance would be higher than the current/ledger balance. And the transaction or balance will be updated to the ledger balance by end of the business day.

Q. When will the ledger balance be available?
A. Ledger balance will be available to see by end of business day or beginning of the business day.

Q. What is ledger balance?
A. Ledger balance is the balance that represents the funds that were available in your bank account before any finical activity has been performed on a particular business day.

Q. What is the available balance?
A. Available balance represents the funds that actually available to spend after any transaction is processed or accepted.

Now that you are provided with all the necessary information on the difference between bank ledger and available balance and we hope this detailed article is helpful to you. If you have any queries about this article or in general, ping us through the comment box below and we will get back to you as soon as possible.