Money & Finance › Payments & money movement › Wire transfers: same-day, final and hard to reverse
Fedwire Funds Service: the Fed's wire system
Since 1918· Institution or agency
Fact, law or dataA rule, statute, definition or measured number.
The Federal Reserve's system for moving large dollar payments between banks, each settled at once and finally in central-bank money.
See it on the Money & Finance map →How it works
A bank sends a payment order; the Fed debits the sender's reserve account and credits the receiver's in seconds, one payment at a time ('real-time gross settlement'). There is no undo. In 2025 Fedwire carried about 217 million transfers worth about $1.15 quadrillion, roughly $4.6 trillion a day, averaging over $5 million each. It runs about 22 hours each business day and switched to the ISO 20022 message format in July 2025. Banks charge customers roughly $15–$35 per outgoing wire.
Why it matters
It is the settlement backbone of US finance: real-estate closings, interbank loans, market trades and the end-of-day settlement of CHIPS all run through it.
Facts, rules and data
The Fed's published Fedwire Funds annual and monthly statistics, Operating Circular 6, Regulation J (which applies UCC Article 4A), and the Fed's payment-system risk policy.
Debates and risks
Whether Fedwire should open on weekends and holidays, as instant-payment systems already do, and what that would mean for bank staffing and liquidity.
Connections (3)
▸Fedwire Funds Service: the Fed's wire system carries most domestic Wire transfers: same-day, final and hard to reverseFact, law or data
The connection
When a customer sends a domestic wire, the bank usually sends it over Fedwire: the Fed debits the sending bank's reserve account and credits the receiving bank's within seconds, and the receiving bank credits its customer. Because settlement is final in central-bank money, the payee bears no risk that the sending bank later fails.
When and why
Across the US on business days, about 22 hours a day; in 2025 roughly 869,000 transfers a day, averaging over $5 million each.
How we know
The Fed's annual Fedwire Funds statistics and Operating Circular 6, plus banks' wire agreements that name Fedwire.
Debates and risks
How much domestic large-value traffic shifts to RTP and FedNow now that both accept payments up to $10 million.
▸CHIPS: the big banks' private dollar wire system nets payments, then settles via Fedwire Funds Service: the Fed's wire systemFact, law or data
The connection
Members prefund a CHIPS account at the Fed each morning by Fedwire. CHIPS's algorithm then releases payments when offsetting flows allow, so a small prefunded pool settles a gross flow many times larger. At day's end, unreleased payments are netted; members with shortfalls send Fedwire funds, and CHIPS pays out remaining balances by Fedwire, ending the day flat.
When and why
Daily in New York; since 2001 CHIPS has given real-time finality using a prefunded account at the Federal Reserve Bank of New York.
How we know
CHIPS rules and public disclosures under international standards for payment systems, and Fed oversight descriptions of the prefunded balance account.
Debates and risks
How CHIPS would cope if a large member failed mid-day; results of stress scenarios are only partly disclosed.
▸The Federal Reserve System (the Fed) operates Fedwire Funds Service: the Fed's wire systemFact, law or data
The connection
The Reserve Banks run Fedwire as a priced service: any bank with a Fed master account can send and receive, paying per-transfer fees that by law must recover costs. The Fed also extends intraday credit, 'daylight overdrafts', so payments keep flowing before incoming funds arrive.
When and why
Since 1918, when Reserve Banks began moving funds by telegraph; computerized from the 1970s; the Monetary Control Act of 1980 required the Fed to price its services.
How we know
Fed operating circulars and fee schedules, the Monetary Control Act, and the Fed's payment-system risk policy on daylight overdrafts.
Debates and risks
Whether Fedwire should extend to weekends, and how its role will change as FedNow and private networks grow.