FedNow
FedNow is the Federal Reserve’s instant payment service, launched in 2023. A payment sent over it clears and settles in central bank money in the same moment, so the beneficiary’s bank has final funds within seconds of accepting the instruction.
Also called: FedNow Service
FedNow is an instant payment service operated by the Federal Reserve. The sending bank issues an instruction, the receiving bank accepts or rejects it within seconds, and value moves between the two banks’ accounts at the Federal Reserve as part of the same act. Clearing and settlement happen together, in central bank money, rather than the message travelling first and the money following later.
It is one of two instant networks in the United States. The other, RTP, is operated by The Clearing House and settles through a joint account that its participants fund in advance; FedNow moves value across each bank’s own reserve account. To the customer the two look identical. To an operator they are separate networks with separate membership.
FedNow is a service for banks, not for businesses. A company reaches it through its bank, and what it can actually do depends on what that bank has enabled. Many institutions joined to receive payments before they were able to send them, so “our bank is on FedNow” can mean one direction only.
A credit sent this way is final. There is no return window and no chargeback, so recovering money means asking the receiving bank to ask its customer to send it back. That suits a payout the sender has already decided to make, and does not suit paying a counterparty whose performance is still in doubt. An ACH credit, by contrast, can still be returned.
In practice
FedNow and RTP are separate networks with separate reach, and a bank on one is not necessarily reachable on the other. Confirm the receiving institution’s participation on the specific network, and in the specific direction, before promising an instant payout.
Commonly confused with
| Term | How it differs |
|---|---|
| Real-Time Payments (RTP) | RTP is The Clearing House’s privately operated instant network; FedNow is the Federal Reserve’s. A bank can be on either, both or neither. |
| Fedwire | Fedwire is the high-value wire system used mainly for large institutional and commercial payments; FedNow was built for retail-scale instant payments. |
See also
- Real-Time PaymentsReal-time payments are bank transfers that clear and settle within seconds, at any hour, and are irrevocable once the receiving bank accepts them. RTP is also the proper name of one of the two US instant networks, which is a common source of confusion.
- FedwireFedwire is the Federal Reserve’s real-time gross settlement system for US dollar wires. Each payment is settled on its own, for its full amount, across the banks’ accounts at the Federal Reserve, and it is final the moment it settles.
- ACHACH is the batch system for domestic bank-to-bank debits and credits in the United States. Payments are grouped into files, exchanged between banks and settled on a processing schedule rather than one at a time, which makes ACH cheap, slower than a wire, and reversible within defined return windows.
- SettlementSettlement is the point at which value actually moves between parties and the obligation between them is discharged. It is a separate step from clearing, which only works out who owes what, and from finality, which is the moment the transfer can no longer be reversed.
Regulatory information checked: 22/Sep/2026