What is a financial float?

Financial float is a term that refers to when institutions and people account for the same sum of money more than once. When this happens, the sum of money exists in two different places. The time it takes for a financial institution to process a transaction causes the float. There are two types of processing floats:

What is a customer float?

'Customer float' is defined as the span from the time of the deposit to the time the funds are released for use by the depositor. The difference between the bank float and the customer float is called 'negative float'. Anything that delays clearing a funds transfer can cause a float.

What is a float scheme?

It was, in essence, a floating scheme, executed on a grandiose scale for years. Since the float is essentially double-counted money, it can distort the measurement of a nation’s money supply by briefly inflating the amount of money in the banking system.

What is a net float?

Net float: The net float is the difference between the disbursement and collection float. An organization may consider this value to understand how its funds may change after all sent and received checks process completely. Related: What Are Transaction Costs? (Types and Examples)