Fedwire (Fedwire Funds Service)
The Federal Reserve's real-time gross settlement system that banks use to send final wire transfers to each other in central bank money.
What Fedwire is
Fedwire is the Federal Reserve Banks' system for moving funds between financial institutions' accounts at the Fed. Each payment settles individually and immediately in central bank money, so it is final and irrevocable once processed. Banks use it for their own transfers and for customers' domestic wire transfers.
How it works
The sending bank submits a payment order in the ISO 20022 format. The Fed debits the sending bank's Fed account and credits the receiving bank's, and the payment carries a tracking number. The receiving bank then credits the beneficiary's account.
- 01 · SUBMIT The sending bank enters a payment order before the Fedwire cutoff.
- 02 · SETTLE The Fed moves funds between the two banks' accounts at once.
- 03 · CREDIT The receiving bank credits the beneficiary's account.
| System | Operator | How it settles |
|---|---|---|
| Fedwire Funds Service | Federal Reserve Banks | One by one, in real time, 22 hours on business days |
| CHIPS (Clearing House Interbank Payments System) | The Clearing House | In real time, with payments netted against each other |
| FedNow Service | Federal Reserve Banks | One by one, in seconds, 24/7/365 |
Fedwire and CHIPS are the two US large-value systems; FedNow carries instant payments up to $10 million.
When businesses use it
- Same-day settlement of large payments, such as property closings
- Bank and corporate treasury transfers that need immediate finality
- Settling securities, loan and trading obligations between institutions
- Funding accounts at other banks before a business-day deadline
Cross River sends and receives wires over Fedwire with same-day settlement and Fed tracking numbers, and automates them through API, including bulk transfers and drawdowns. OFAC screening runs before Federal Reserve processing. See wires at Cross River.