Availability Float

  

If you've ever had a checking account, you should know about this...it may have burned you, even if you haven't heard the term. This concept represents the period of time between depositing a check into your account, and having the funds available for use.

The availability float occurs because the bank has to manually verify the check information (such as whether the person who issued it actually has the funds). If you're like us, you may have once or twice misunderstood how long you had to wait for the money to be there, and inadvertently overdrawn your account. Hurray for direct deposit!

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Finance: What is a Savings & Loan v. a B...187 Views

00:00

finance a la shmoop what is a savings and loan versus a bank all right

00:09

savings and loan some savings and loans yeah it's a cleverly named you know like [Case of cash appears]

00:15

home loans car loans stuff like that banks issuer of credit cards and big

00:20

lines of credit for small to large business savings and loans the little

00:25

local retail gal banks the big fat cat corporate dude with big appetites and [Woman sitting behind savings and loans desk]

00:31

small fast red convertible cars with a stick-shift

00:34

savings and loans owned either by the lenders and borrowers of the savings and

00:39

loan itself you know kinda like a co-op or it can be set up like you know normal

00:43

ish corporation banks usually owned just by shareholders some are big like this

00:49

guy and that guy yeah and there's a whole bunch of other small fries too

00:52

savings and loans can loan up to 20% of their assets half of that for big [Savings and loans assets pie chart appears]

00:57

business half of that for small business loans at least these days and why did

01:01

delineation well because small business is default a whole lot more than big

01:06

businesses savings and loans are allowed to tap into the very liquid Federal Home

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Loan Bank system Fannie Mae in the gang those guys and in order to do that ie [Man with savings and loans briefcase for head appears]

01:16

get cheaper money in return SNL's have to have at least 65% of their assets

01:22

invested in residential mortgages meaning most of their loans are you know

01:27

small home mortgages a lot of first-time buyers there all right well why is this

01:30

a thing well because the American Dream from a political perspective revolves in [A couple moving into house]

01:35

large part around owning your own home right not a bad idea the government has [Uncle Sam appears and boy walks away with pile of cash]

01:40

gone to a whole lot of effort to make it easy for the little guy to borrow money

01:44

and have his or her own little castle a little to start anyway banks those cold [Boy dancing outside castle]

01:49

cruel concrete walled things don't live under this same structure they don't get

01:54

to tap into the same cash fool reserves that SNL's do is not all the time but

01:59

they get to loan money a more or less wherever they want to loan money there's

02:02

way fewer strictures on banks than SNL's banks exist to make money for the

02:07

shareholders of the bank duh and they're financially Darwinian beasts [Charles Darwin beast appears in misty forest]

02:12

good at lending money that costs them low rates to rent and then they rent it

02:16

out at much higher rates to customers right and they live on that spread so

02:21

banks also get hot and heavy with other kinds of borrowings things like credit [Man and woman sitting in car looking at sunset]

02:25

card issuance like I think about how much money your credit cards charges and

02:29

so on they get a big piece of that and servicing a debt you know and wealth

02:32

and/or financial management services like they take a percent of year or so

02:37

for managing all your dough and to some extent merchants and investment banking

02:41

services as well you know for the big guys who are global so banks think big

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loans big money big spreads wholesale savings and loans think small loans

02:50

small money small spreads retail banks mr. Potter savings and loans [Mr Potter appears]

02:55

George Bailey and the rest of the Bedford Falls gang did you hear that a

02:59

video editor just got his wings [Man grows wings]

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