Available balance
In one sentenceThe amount you can actually withdraw or transfer from the account right now, after excluding held amounts and deposits not yet collected.
Simply put
The balance on the statement is not always what you can spend. The bank may hold part of it as cover for a letter of guarantee, or not release a deposited check until it is collected. What remains is the available balance.
Plan your payments on the available balance, not the book balance, so that a check you issued is not returned or a transfer is not rejected.
Worked example
A contracting business's balance on the statement is 50,000 SAR, including a check under collection of 8,000 SAR, and 10,000 SAR held as cover for a letter of guarantee.
Balance on the statement50,000 SAR
Check not yet collected8,000 SAR
Amount held for a letter of guarantee10,000 SAR
Available balance50,000 − 8,000 − 10,000 = 32,000 SAR
What can be spent today32,000 SAR
Formula: Available balance = balance − held amounts − uncollected deposits
Don't confuse it with
Bank statementThe statement shows the balance after each transaction, while the available balance is what can actually be spent from it right now.