# Holding funds

Sometimes you want to reserve funds in an [Account](/documentation/api/accounts) for activity you know is coming but that hasn't happened yet. For example, if you use an external payment processor, you can create holds in response to its activity. This keeps the account's ledger in Increase in sync with the known, but not yet reflected, purchases.

Increase lets you do this by placing a hold on the Account, which reduces its [available balance](/documentation/balance#available-balance) without moving any money. If the account [earns interest](/documentation/interest-and-referral-bonus), it continues to earn interest on the held funds.

## Placing a hold

You place a hold by calling the API [Create a Pending Transaction](/documentation/api/pending-transactions#create-a-pending-transaction) or by clicking "Create Hold" on an Account page in the Dashboard. The endpoint returns a Pending Transaction with a `status` of `pending`. Like all negative Pending Transactions, it decreases the available balance (the amount you're able to move) while leaving the [current balance](/documentation/balance#current-balance) unchanged.

The Pending Transactions created by this API will always have the source `category` of `user_initiated_hold`.

You can't make a hold that would bring the available balance below zero.

## Releasing a hold

When you no longer need the reserved funds, you release the hold by calling [Release a Pending Transaction](/documentation/api/pending-transactions#release-a-user-initiated-pending-transaction) with the Pending Transaction's ID. Only a `pending` Pending Transaction with a `category` of `user_initiated_hold` can be released.

Releasing the hold transitions the Pending Transaction to a `status` of `complete`. A completed Pending Transaction no longer counts against the available balance, so the reserved funds become available again. Because releasing a hold doesn't move money, no Transaction is created.