Money & Finance › Payments & money movement › Instant payments: 24/7 bank transfers that settle in seconds
FedNow: the Fed's instant payment service (2023)
July 20, 2023· Institution or agency
Fact, law or dataA rule, statute, definition or measured number.
The Federal Reserve's 24/7 instant payment service, launched July 20, 2023 and open to any US bank or credit union.
See it on the Money & Finance map →How it works
A sending bank debits its customer and sends a payment; the Fed moves funds between the two banks' master accounts in seconds, any hour or day, and the payee can use the money at once. Like RTP, it is credit-push and final. The Fed charges banks 4.5 cents per payment. The network limit rose to $1 million in June 2025 and $10 million in November 2025, though banks set their own lower caps (default $100,000). Over 1,400 institutions had joined by September 2025.
Why it matters
It lets the roughly 9,000 US banks and credit unions, small ones included, offer instant payments through the Fed rather than through a big-bank network.
Facts, rules and data
Federal Reserve press releases and FedNow operating circulars, the 2019 Federal Register notice announcing the service, and the Fed's participant counts.
Debates and risks
Whether volume will grow large, since most participants receive but few send, and whether the Fed should compete with a private bank network at all.
Connections (3)
▸FedNow: the Fed's instant payment service (2023) is the Fed's version of Instant payments: 24/7 bank transfers that settle in secondsFact, law or data
The connection
FedNow offers the same thing as RTP, seconds-fast, final, 24/7 transfers, but run by the central bank and settled in banks' Fed master accounts. Because nearly every bank already has a Fed account, it gives small banks and credit unions a direct route to instant payments without joining a big-bank network.
When and why
Announced by the Fed in August 2019 and launched July 20, 2023 with 35 early banks and credit unions; over 1,400 participants by September 2025.
How we know
Fed press releases, FedNow operating circulars, and Federal Register notices on the service and its pricing.
Debates and risks
Whether two instant systems will grow the market or split it; FedNow's sending volume is still small next to RTP's.
▸FedNow: the Fed's instant payment service (2023) is often mistaken for Central bank digital currencies (CBDCs)Fact, law or data
The connection
FedNow moves existing bank deposits between banks; the public never holds money at the Fed, and no new money is created. A CBDC would be a digital claim on the Fed held directly by the public. Social-media rumors in 2023 said FedNow was a CBDC or would replace cash; the Fed publicly said it is not.
When and why
Rumors peaked around the July 2023 launch; a January 23, 2025 executive order then barred federal agencies from creating a US CBDC.
How we know
Fed statements and FAQs saying FedNow is not a CBDC, the service's design documents, and news fact-checks.
Debates and risks
Critics argue instant central-bank infrastructure could ease a future CBDC; supporters say the two are unrelated. Both sides cite the same design.
▸FedNow: the Fed's instant payment service (2023) competes with RTP network from The Clearing House (2017)Fact, law or data
The connection
Both offer 24/7 final transfers for about 4.5 cents a payment with $10 million limits. RTP carries far more volume and has the largest banks; FedNow has more participants, many of them small. The two are not linked, so a payment reaches a bank only on a network it has joined; many large banks connect to both.
When and why
Nationwide since FedNow's 2023 launch; FedNow raised its limit to match RTP's $10 million in November 2025.
How we know
Each network's published pricing, limits and participant counts, and the public comment record on whether the Fed should build FedNow.
Debates and risks
Whether the Fed should compete with a private system at all, and whether the two networks will ever interconnect.