What is float in banking?

In economics, float is duplicate money present in the banking system during the time between a deposit being made in the recipient's account and the money being deducted from the sender's account. It can be used as investable asset, but makes up the smallest part of the money supply.

How does a check float work?

Until the check clears the account it is drawn on, the amount it is written for "exists" in two different places, appearing in the accounts of both the recipient’s and payer’s banks. The float is essentially double-counted money: a paid sum which, due to delays in processing, appears simultaneously in the accounts of the payer and the payee.

What is a float & how does it work?

The float is essentially double-counted money: a paid sum which, due to delays in processing, appears simultaneously in the accounts of the payer and the payee. Individuals and companies alike can use float to their advantage, gaining time or earning interest before payment clears their bank.