Float

Float is the interval between when a check is written and when it clears the bank account on which it was drawn. Activities included in float, and which can extend its duration, are:

• The time required for the payer to send a check to the payee

• The time required for the payee to present the check to its bank for payment

• The time required for the payee’s bank to present the check to the payer’s bank

• The time required for the payer’s bank to transfer the funds to the payee’s bank

Electronic payments greatly compress the amount of float time, usually to just one or two days.

Float also refers to the number of shares of a company’s stock that are available for trading. This amount is calculated as the total number of shares outstanding, minus closely held shares.