Float, or money tied up in the process of check clearing, consists of transit float arising from the administrative functions of the payee that delay the actual deposit of the check and processing float created in the Federal Reserve's check clearing system.

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Float, or money tied up in the process of check clearing, consists of transit float, which arises from the time it takes for a check to move from the bank where it was deposited to the bank on which it was drawn, and processing float, which can occur at either the bank of deposit or the Federal Reserve if the check is processed there. The administrative functions of the payee that delay the actual deposit of the check do not create transit float; they contribute to mail float or delays before the check is deposited.

Float, or Money Tied Up in the Process of Check