Can i withdraw money from ledger balance

Many people look at their bank statements and notice that they have two balances listed. They may wonder why the balances are different, despite the fact that they are listed for the same account.

The reason is the ledger balance represents the total amount of funds in an account but is different from the amount a person may use, or withdraw. If a person considers only his ledger balance, he may write checks or arrange payments for more than he actually has available. This can lead to overdraft fees from his bank as well as fees charged by the company or person to whom he wrote the checks or made the payments.

Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Free Accounting Course. Login details for this Free course will be emailed to you. Forgot Password? Article by Madhuri Thakur. What is Ledger Balance?

Leave a Reply Cancel reply Your email address will not be published. Please select the batch. Cookies help us provide, protect and improve our products and services. By using our website, you agree to our use of cookies Privacy Policy. A bank uses the terms ledger balance and available balance to specify the position of funds in an account. Ledger balance is the balance available at the beginning of the day.

On the other hand, the available balance may be defined in two ways, it is:. A ledger balance on the bank account of a customer is that balance displayed on the bank statement. You will find a ledger balance and an available balance when you are checking your account balance. Both the terms are used for your account balance but differ from each other. It may sound as if you should focus on your available balance, but the truth is that the ledger balance is your actual balance.

The ledger balance includes only the credits and debits already cleared into your account. It includes all the outstanding cheques, which have not cleared the account, along with the incoming funds that are not yet available. You should pay more attention to the ledger balance while determining whether you have enough balance to make a withdrawal or not.

It is safe to use your ledger balance, as available balance will not show the amount not cleared. When you withdraw money from your bank account, it shows a debit.