Fedwire is a real-time electronic fund transfer (wire transfer) system. Operated by U.S. Federal Reserve banks, this system is generally used by Federal Reserve (Fed) banks to complete individual transactions quickly.
Every time you make a fund transfer via Fedwire, you’ll be provided with a reference number to track the status of your transfer, whether it is in process, successful, or failed. With the number, you’ll easily know where your money is on its way.
If you do not yet know what the Fedwire tracking number looks like or how to get it, you can discover more about it in this post. Let’s get started!
What is FedWire Tracking Number?
The Fedwire tracking number is also known as the IMAD/OMAD number, which stands for Input/Output Message Accountability Data. This is a unique number that you’ll obtain for each transaction made via the Fedwire system. And the number will be generated by your wire transfer using the Federal Reserve Bank Service.
As the name implies, the tracking number can be used to track your wire transfer with Fedwire. Also, your bank will need the number if they need to reach out to the funding provider.
You’ll get your Fed tracking number from your bank after your funds have been transferred. If your bank does not provide you with the number, you actually need to contact the bank manager or the bank wire department to get help.
What Does the Fedwire Tracking Number Look Like?
The Fedwire tracking number is a combination of date, alphanumeric (source identifier), and sequence number. The number is shown in the following format:
Date (YYYYMMDD or MMDD) → Source identifier (eight characters) → Sequence number (six digits)
For example: 20240725-ABCD3011-012345
About Fedwire
Fedwire, previously known as the Federal Reserve Wire Network, has become the best choice for many fund holders to carry out large transactions with a transfer system so that funds can be received on the same day by the recipient. This networked system works to process payments between Fed member banks and other participating institutions.
The system of Fedwire has been widely used by financial institutions, including depository financial institutions (FI) in the United States and branches of certain foreign banks or government groups in America.
Fedwire is primarily not-for-profit, but the system charges transaction fees, as mandated by law. Both participants, the sender and recipient, must pay a small fee for certain transactions.
Historically, the system of Fedwire, which is operated by the Fed, dates back more than 100 years, along with two other wholesale payment systems, i.e., the National Settlement Service and the Fedwire Securities Service.
This system began to be applied in 1915, when the Federal Reserve Bank began transferring funds electronically. In 1918, they finally formed their own system for processing transfers.
Between 1920 and 1970, this system was still largely telegraphic. However, the system began to shift from telegraphy to telex. As technology advanced, they turned to computer operations and then to proprietary telecommunications networks.
The Fedwire system’s services were free of charge and were only available to member banks until 1981. After the Depository Institutions Deregulation and Monetary Control Act of 1980 (Monetary Control Act) was signed, the Fed began charging fees for every transaction made on Fedwire.
How Does Fedwire Work?
In order to use the Fedwire transfer system, fund holders must have an account with a Fed bank. And the Fed holds both sender accounts and receiver accounts and works to immediately settle each transaction.
To complete commercial payments such as making tax payments or buying or selling federal funds, they can transfer funds from their accounts to themselves or on behalf of their clients.
Here’s how the wire transfer is made via Fedwire!
Step 1After the sending bank receives the proper wiring guides for the receiving bank, the transfer can be made. The guides here include the receiving bank’s routing number, recipient’s name, account number, and dollar amount being transferred. |
Step 2Once all is completed, the Fedwire system will deliver the information to the Federal Reserve. |
Step 3After the Fed receives the instruction, they will debit the funds from the sending bank’s reserve account and credit the receiving bank’s account. |
Step 4After settlement, it is final, meaning your transaction cannot be canceled. Then, the recipient’s bank will be informed of the credit. |
The wire transfer made through Fedwire will be settled instantly on the same business day.
Why Do People Use Fedwire for Fund Transfer?
Designed to have high durability, the Fedwire system has continued to develop since its launch. Between 1996 and 2016, the number of transfers and the total dollar value of transactions with Fedwire increased by approximately 79% and 207%, respectively.
As of 2009, over 9,289 financial institutions transferred funds electronically with Fedwire. In 2022, about 196 million transfers with a total value of more than one quadrillion US dollars will have been processed by Fedwire.
So far, Fedwire, along with the Clearing House Interbank Payments System (CHIPS), has become the primary U.S. network for large-value domestic and international transactions.
Pros
In addition, there are some advantages that Fedwire offers, including:
-
- Fast and Safe: Fedwire allows funds to be transferred quickly and safely, and they can be settled on the same day.
- Global Reach: Fedwire fund transfers can be made domestically and internationally, even if the recipient and sender are in different countries.
- Currency options: Fedwire allows you to make fund transfers in multiple currencies. Sure, it is such a beneficial thing, especially for those who have international business.
- Fees: Wire transfer, which is made domestically, will charge you a little.
Cons
Even though there are a few benefits you’ll get from using Fedwire, it’s still imperfect. The following are disadvantages of Fedwire:
-
- Risk: Since Fedwire is a wire transfer and cannot be reversed, it carries a high risk if your money is transferred in error or as a result of fraud.
- High Cost: Transferring funds internationally has much higher fees, but they vary depending on the amount and type of transfer.
Well, those are the pros and cons that you may find when working with Fedwire to make fund transfers.
