Banking Services of the Federal Reserve System The Federal Reserve System (FRS) is a bank that was founded in 1913. It was founded by Congress for the purpose of providing the nation with a more sophisticated and secure financial system. The FRS has duties that fall into four areas. They are conducting the nations monetary policy, supervising and regulating banking institutions, maintaining the financial systems stability, and providing certain financial services to the U. S. Government, financial institutions, public, and foreign officials. Banking services provides a payment system that is the largest in the world. The Federal Reserve banking system is a faster way to settle payment transactions. There are several things that the Federal Reserve banking system can do that provide services that you and I can use.The fastest way the FRS can help you out is by the Electronic Funds Transfer (EFT). This is also a more secure method rather than by check or cash. The two types of services that the EFT offer are known as the Automated Clearinghouse (ACH), and Fedwire. The ACH was developed mutually by the FRS and the private sector in the early 1970s. The ACH is a more professional alternative to checks. Since the 1970s, the ACH has become a nationwide organization. There are ACH credit and debit transfers that can by used by businesses and consumers. ACH payments are sent out in groups to the FRS processing center. The FRS provides ACH services to all depository institutions. Both the Government and commercial sectors use the ACH. Ach transfers are less costly when compared to checks. Fedwire allows depository institutions to transfer funds on behalf of their customers, and are transferred in seconds. Fedwire funds, unlike the ACH, are processed individually, and 99% are made on-line, although there are still a few banks who make the transaction over the phone. Even thought the EFT is the faster way of doing things, the...
