A Fedwire funds transfer (US RTGS)
A high-value dollar payment settles one-for-one across the banks' accounts at the Federal Reserve, in real time and with finality — no netting, no waiting for a cycle.
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The originator requests a wire
Originator (payer) → Bank Alfa (sending bank)
A corporate treasury instructs Bank Alfa to send a high-value dollar payment to a beneficiary at another US bank. Nothing has moved yet — it is a request.
Step 1 of 7: The originator requests a wire
- 02ProcessingBank Alfa validates and screensBank Alfa (sending bank)
- 03PostingBank Alfa debits the originatorBank Alfa (sending bank)
- 05SettlementThe Fed settles the payment in real timeBank Alfa (sending bank) → Cassia Bank (receiving bank)
- 07PostingThe beneficiary is creditedCassia Bank (receiving bank)
Full step-by-step text (works without JavaScript)
- 02ProcessingBank Alfa validates and screensBank Alfa (sending bank)
Format checks, sanctions screening, and a balance check on the customer run before the bank commits value to an irrevocable rail.
Screening checkpoint: Outbound screening — A Fedwire payment is final once settled, so screening happens before the message is released.
- 03PostingBank Alfa debits the originatorBank Alfa (sending bank)
The customer's account is reduced. The money has left the originator, but the receiving bank does not have it yet.
- DR Originator's account at Bank Alfa — USD 5,000,000.00
- 05SettlementThe Fed settles the payment in real timeBank Alfa (sending bank) → Cassia Bank (receiving bank)
The Federal Reserve debits Bank Alfa's account and credits Cassia's account, one payment at a time, in central-bank money. Settlement is immediate and final.
- DR Bank Alfa's account at the Federal Reserve — USD 5,000,000.00
- CR Cassia's account at the Federal Reserve — USD 5,000,000.00
- 07PostingThe beneficiary is creditedCassia Bank (receiving bank)
Because the interbank leg already settled with finality, Cassia can credit its customer without waiting for anything else.
- CR Beneficiary's account at Cassia — USD 5,000,000.00
What this simplifies: One payment settling gross. Real RTGS operation depends on intraday liquidity management, daylight credit, and queue handling across the whole day.
Sources for this flow3
- Official requirement
Fedwire Funds Service ↗ — Federal Reserve Financial Services
The Fedwire Funds Service completed its ISO 20022 implementation on 14 July 2025.
- Market practiceMarch 2003 edition
A glossary of terms used in payments and settlement systems ↗ — CPSS (now CPMI), Bank for International Settlements
Terminology has evolved since this edition; newer CPMI publications refine some definitions.
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal
What this simplifies: Fictional banks and a single high-value payment; real Fedwire flows involve many participants, daylight-overdraft policy, and operating-hour cut-offs not shown here.
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.