We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What Are Same-Day Funds?

By Emily Daw
Updated: May 17, 2024
Views: 5,879
References
Share

In finance, same-day funds refer to money that is available for use on the same day that it is deposited, usually in real time. These funds can be withdrawn in cash or transferred to other financial institutions or individuals almost immediately upon receipt. Most same-day transactions are done through electronic wire transfers. Types of same-day funds include federal funds, the Clearing House Interbank Payments System (CHIPS) funds and transfers within individual banks.

In a federal funds transaction, or fedwire, the sending bank's federal reserve account is debited in the net payment amount, and the receiving bank's account is credited the same amount. This process takes place electronically. It allows large amounts of money to be sent almost instantaneously to institutions within the country.

Another way for banks to send same-day funds is through CHIPS. In contrast to the government-owned fedwire, CHIPS is owned by its member financial institutions, which are primarily large banks. Banks that are not members of CHIPS often have accounts with banks that are members. This allows smaller banks to do business through CHIPS.

When CHIPS transactions are processed funds are received on the same day, but payments are made on the basis of daily netting rather than in real time. For instance, Bank A might send $150,000 to Bank B through CHIPS in the morning. Bank B then sends $100,000 to Bank A in the afternoon. Rather than processing the transactions separately, as they occur, CHIPS would make a net payment of $50,000 to Bank B.

Most banks also offer free real-time wire transfers between their account holders. These can often be done through online banking. Transfers can be one-time, or they can be set up to reoccur periodically. The sender usually must know the account number of the person receiving the funds. Same-day funds sent between individuals from different banks may incur fees.

Next-day funds are not available for use until the business day following the transaction. These include most consumer deposits, such as paychecks. Cash deposits, however, are sometimes available on the same day.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Link to Sources

Editors' Picks

Discussion Comments
Share
https://www.wisegeek.net/what-are-same-day-funds.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.