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It is the process of writing a check with no bank balance covering the check in the hope that in the due date of the check there will be a balance in the bank.
In the world of finance, floating is a concept that is widely utilized and it is one in which consists in using adequately the existing term between the issuing of a check and the moment in which it becomes cash. This is due to the fact that within banks there exist a period of compensation, which may be taken advantage of for financing purposes.
How may a person take advantage of playing the float? The answer is simple and it does not require complicated techniques to reap the benefits. The only requirement needed is that you possess a strong will and to be quite organized with your budget.
If this you have a variety of credit cards, you can apply to enter the game of playing the float, which consists of the following:
1. Deposit in the bank a quantity of money that is equal to the amount planed on being spent with the credit card.
2. Purchase with the credit card the majority of the things that are needed.
3. Paying the due amount in the card until the date the date of its offered interest rate is expired.
Which is the benefit this person obtained? When you paid the total amount, you made use of free financing (at 0% interest) and no interest was charged. At the same time you maintained money deposited a bank account earning interest. The bottom line is a gain obtained from the interest of the money deposited.
An important point that you must keep in mind is that this game will have favorable results only if you don’t get into debt with the credit cards since once the free financing is used, you will loose the possibility of taking advantage of this game and loose the benefits that go along with it. Remember that you must confront the interest payments, which are usually notoriously high.
Another question would be; what can you do if you have a credit card with a large amount that is owed? You should try to minimize the amount owed as much as possible whether it is consolidating your debts by obtaining a loan with a much lower interest rate and closing these credit cards temporarily. After you have cancelled your debt, you should force yourself to have a maximum of two credit cards and to start utilizing the float to obtain the benefits that go along with it.
So that you may enter this game, you must organize your personal finances. The benefits that may be obtained will greatly depend on the control you have over your spending habits and that your expenditures do not surpass your income. Don’t shop just to buy things! You must keep in mind that when you make a purchase, you will obtain the maximum benefit possible from that purchase. You should not invest in items that quickly depreciate or in things that are not necessary in your life.
By following this advice, it will significantly help your financial situation. You should enjoy a good financial life and never be wondering as to where you are going to obtain the money today in order to make your next credit card payment. "Every single life only becomes great when the individual sets upon a goal or goals which they really believe in, which they can really commit themselves to, which they can put their whole heart and soul into." - Brian Tracy
Playing the Float:
Float plays an important role in cash management. The cash balance as per the company's records may not always be the same as the bank balance available. The difference between both the balances is called as the Net float. When the company has issued many cheques that are awaiting clearance, the available balance will be larger than the ledger balance. Similarly when the company has deposited many cheques that are yet to be collected by the bank, the available balance will be smaller. The company can take advantage of the smaller cash balance available if it expects a little longer time for its issued cheques to get cleared. This is called as playing the float. Firms can manage the float by speeding up collections and slowing down payments.
Types of Float:
Float.
In investment terms, a float is the number of outstanding shares a corporation has available for trading.
If there is a small float, stock prices tend to be volatile, since one large trade could significantly affect the availability and therefore the price of these stocks. If there is a large float, stock prices tend to be more stable.
In banking, the float refers to the time lag between your depositing a check in the bank and the day the funds become available for use. For example, if you deposit a check on Monday, and you can withdraw the cash on Friday, the float is four days and works to the bank's advantage.
Float is also the period that elapses from the time you write a check until it clears your account, which can work to your advantage. However, as checks are increasingly cleared electronically at the point of deposit, this float is disappearing.
In a credit account, float is the amount of time between the date you charge a purchase and the date the payment is due. If you have paid your previous bill in full and on time, you don't owe a finance charge on the amount of the purchase during the float.
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Very well explained in detail by Sreedevi and Venkatraman about the FLOAT used by individuals and by banks to maximise the benefit from a product or self insurance
Dear Miss Sara,
Playing a float comes like driving a boat, riding a car, etc,... by means of leading the ship into the correct track, as leading the team in our business language to the profitable aim and target..
I agree with all answers given by colleagues.
I agree with all the previous answers
It is up to the same meaning
And I have a comment in the case Check float
Check float refers to the amount of time it takes for money to leave your checking account.
Check float helps to keep some people out of trouble, but it will increasingly cause problems for those who rely on it.
SO
Must any person make sure he is understand what doing to taking advantage of the float
nothing I can say after all this answers
agreed with ladies ans gentlemen
Float currency
Flotation is to let the exchange rate of a currency, any equivalence with other currencies, determined by the forces of supply and demand in the cash market, and different government policies toward float their currencies depending on the level of emancipation of the national economy, and the adequacy of its performance, and flexibility of its production apparatus.
Forms of flotation
Free-floating: It means leaving the currency exchange rate changes and determined freely with time according to market forces, and only the intervention of the monetary authorities to influence the speed of change in the exchange rate, rather than the reduction of that change, and follows this form of floating currencies in some capitalist countries advanced industrial countries such as the United States dollar and the pound sterling and the Swiss franc.
Flotation orbit: the means to leave the exchange rate is determined according to supply and demand with asylum central bank to intervene whenever necessary to modify this price compared to the rest of the currencies, in response to a range of indicators such as the amount of the gap between supply and demand in the foreign exchange market, and the price levels of spot and forward exchange, and developments in the parallel market exchange rate and follows this form of flotation in some capitalist countries and a group of developing countries that links the exchange rate peg to the dollar or the pound sterling or the French franc (previously) or a basket of currencies.
Flotation policy has evolved to become one of the most important tools used by the monetary authorities to achieve its economic goals, and practiced this policy intrusive procedures, including:
* Impact on the cash market, through the influence of movements in supply and demand, and through the sale or purchase of the local currency.
Influence the interest rate to raise the discount rate or decrease.
* Impact on the size of Altjarhaforeigh by quantifying the import or export promotion.
Reasons for flotation
Revealed the political and economic developments in the early sixties that the international monetary system based on the principles of the Bretton Woods conference [t] the adoption of a system of fixed exchange rates based on the dollar convertible into gold at a fixed price, has become unable to control fluctuations persistent and violent in currency exchange rates of countries Members for reasons including:
* Differing growth rates, economists major industrialized nations, has emerged as Western Europe and Japan took a major economic powers compete USA.
* Different inflation rates among industrialized countries, and its impact on interest rates, then fluctuations in currency exchange rates.
* Increasing the deficit in the balance of payments as a result of increased spending American whether American or foreign investment to finance the expenses of the war ڤatnam.
* Increasing competition and conflict of interests among the advanced industrial countries.
* Contradiction embodied in the Bretton Woods system lies in the need for the global economy to international liquidity provided by the flow of dollars outside the United States as a result of the trade deficit, and this coincided with the growing need for non-US currency and confidence in its ability to fund the growth of the global economy.
* Breadth of capital movements engaged in speculative hot, especially the European market dollars which funded the movements of speculative severe suffered by the pound sterling and the French franc and the German mark and the Italian lira at the end of the sixties.
The United States was the most prominent use of flotation policy at the global level to maintain competitive positions and serve political and economic purposes.
In an attempt to keep pace with these developments, new economic and political agreement endorsed the International Monetary Fund in May1976 to float the currency step on the road to reform of the international monetary system.
The most important experiences of flotation
The resort United States of America in the early eighties to pursue a policy of high interest rates and a means to embody the process of flotation and implementation of the most important experiences of floating currencies in the world and the most famous, as was the dollar exchange rate average in1980 against the Deutschemark1 =1.81 Marc rose in March1985 to1 =3.45, an increase of nearly100%.
Have contributed to this monetary policy in achieving the goals envisaged at the time, and most importantly attract capital to finance the budget deficit and the expenses of the Vietnam War and the draft of Star Wars, but it also led to the lifting of the investment costs due to interest rate hike, and hurt exporters Americans, because the prices of their goods become high currency foreign, which led to the emergence of the economic downturn, and then began the American administration to follow the policy counterproductive, dropped the dollar exchange rate against the mark to1 =1.57 in January1988 and are often exposed the dollar to violent tremors make the price fall further against the German mark and the Japanese yen.
Economic effects of the float
Lead flotation practically to one of two situations: raise the value of the local currency or decrease, and both cases affect prices [t] In foreign trade and economic growth in general, and vary these effects depending on the nature of the country, which floated its currency, as it is different these effects in advanced industrial countries than in developing countries.
Example: If led float currency to rise in exchange rate versus other currencies, ie to the high price equated with foreign currencies;, that adversely affects the movement of exports, because the price of domestic goods become high for importers of foreign decreases the demand for them (according to the degree of elasticity of demand), this leads to the increase in imports because the price of foreign goods become cheaper for importers locals, thus contributing to the trade deficit, and can be encouraged domestic capital to move towards Alastosmaraforeig because it became possible to swap the unit of local currency units more than the foreign currency, and thus affected the balance of payments of the state affected negative, and Alsnaahmahlah affected by their exposure to import competition, and growth slows and unemployment rises.
In the case of floating currency exchange rate toward the low low price of any equivalent with other currencies adverse effects occur.
However, these economic impacts to float the currency does not apply just is not valid in the case of developing countries, for several reasons, most notably that Tlbalaalmi on developing countries' exports mostly high flexibility, and the productive apparatus has a relatively weak and is unable to meet the Tlbaforeig, if any, which carried out most of its foreign trade the most important currencies of its trading partners, and its currency is not national, and restrict the movement of the local currency much.
These effects important for the float has increased the importance of its use by the monetary authorities to achieve its economic goals and this is what explains the daily fluctuations of the ongoing currency exchange rates among themselves, and then explains the monetary chaos experienced by the world today.
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