What is a reserved balance?
When making a new BPAY transfer into CoinJar, that amount is automatically added to your reserved balance. Funds within your reserved balance can be used to trade digital currencies within CoinJar immediately but cannot be sent out of CoinJar for up to seven days.
Once the reserved balance period has ended, your funds can then be sent to an external digital currency address, loaded onto CoinJar Swipe, or withdrawn to a linked bank account.
Why are reserved balances important?
Reserved balances greatly reduce the ongoing risks of bank chargebacks and fraudulent payments passing through CoinJar. Without them, it would be possible for funds to be deposited, and then irreversibly sent onto the blockchain - well before being reported as a fraudulent payment by the bank account owner.
Along with the security benefits that come with reserved balances, they also allow CoinJar to provide larger daily deposit limits by default - allowing better flexibility when it comes to trading digital currencies.
Managing your reserved balance
Early withdrawal allowance
While reserved balances are necessary to reduce the risk of fraudulent payments, the obvious downside is delaying instant withdrawals for legitimate use cases. To assist with this, a portion of the funds contained within your reserved balance are able to be sent externally before the reserved balance period has ended.
When making a new bank transfer into CoinJar, the amount that can be sent externally from your CoinJar will be displayed within the 'Quick Deposit' section of your CoinJar. As soon as your bank transfer arrives, you'll be able to send up to that amount right away.
The scope of your reserved balance
Your reserved balance is not increased when you receive incoming digital currency payments, or a non-reversible deposit method such as Blueshyft. Any funds that enter your CoinJar via these payment methods can be withdrawn to your linked bank account, loaded onto CoinJar Swipe, or sent to an external address at any time.
Checking your reserved balance
You can check your reserved balance at any time - it is displayed with your Portfolio balance in the Accounts section of CoinJar.
If you do foresee the need to make an immediate digital currency payment to an external address in the future, please ensure you consider the reserve period, and your early withdrawal allowance. Funds can always be stored within your CoinJar's Cash Account or digital currency accounts to be used later for instant external payments.
How reserved balances are calculated
The length of your reserved balance period - as well as the size of your early withdrawal allowance - is determined automatically depending on a number of security factors. In general, as you continue to grow your history of reliable bank transfers into CoinJar, your reserved balance period will decrease, and your early withdrawal allowance will increase - allowing you to access more of your funds as soon as they arrive at CoinJar. Reserved balances can last for up to seven days.
Chargeback requests
Raising a chargeback request for a bank transfer sent to CoinJar can have an adverse affect on your reserved balance. A chargeback request that results in a reversal will greatly reduce your early withdrawal allowance and increase your reserved balance period length for future bank transfers into CoinJar.
How price fluctuation can affect reserved balances
Because your reserved balance controls the digital currency amount you can send from your CoinJar to an external address, price fluctuation can affect your ability to make new Payments.
An example, assuming the reserved balance won't reset for seven days:
If you make a $1,000 Australian dollar deposit into your CoinJar, your reserved balance will remain at $1,000 for the next seven days. This will temporarily prevent you from sending $1,000 worth of digital currencies to an external blockchain address. In the meantime, you might convert that amount into $1,000 worth of bitcoin. If the bitcoin price were to increase by 50% during the seven day period, you’d now hold $1,500 worth of bitcoin. You could send out the difference between the current bitcoin valuation, and the amount of your current reserved balance - in this case $500 worth of bitcoin.
The same can be said for a decrease in valuation. If the bitcoin price were to decline drastically during this seven day period, it could potentially prevent you from sending out a bitcoin amount that has already been stored in your CoinJar.