RTGS stands for real-time gross settlement. Gross means each payment settles individually rather than being bundled and netted with others, and real-time means it settles continuously through the day rather than in an end-of-day batch. Because the central bank moves actual reserve funds for each payment, settlement is final and irrevocable once done, which is why RTGS is used for high-value and time-critical transfers. Examples include Lynx in Canada, Fedwire in the United States, and T2 (formerly TARGET2) in the euro area. These systems carry the money leg between banks, so a customer-facing wire typically rides on top of an RTGS settlement between the banks involved.
In a flow
RTGS is the bottom money leg between banks: when a wire moves, the sending bank's reserves at the central bank go down and the receiving bank's go up, one payment at a time, with finality. Customer accounts are debited and credited around that core settlement.
Common misconceptions
Myth: RTGS and instant consumer payments (like an e-transfer) are the same thing.
Reality: They are different layers. Consumer instant rails settle small retail payments and often net positions between banks, while RTGS settles large interbank amounts gross, one by one. Instant rails frequently rely on an RTGS or central-bank settlement underneath to make funds final.
Myth: The RTGS network sends the money to the recipient's bank account.
Reality: RTGS settles funds between banks' accounts at the central bank. The recipient's own bank then credits the customer. The system moves interbank value and finality, not the final retail deposit itself.
Related terms
See it in a guide
Sources
- Lynx high-value payment system ↗ · Payments Canada (operator). Canada's RTGS system for large-value, time-critical payments.
- Fedwire Funds Service ↗ · Federal Reserve Financial Services (operator). U.S. real-time gross settlement service for the money leg of wires.
- BIS / CPMI on real-time gross settlement ↗ · BIS / CPMI. Standards and definitions for RTGS and settlement finality.
Educational, plain-English explainers. Not legal, compliance, tax, or financial advice. These cover fundamentals, not current fees, limits, or rates (which change). Rails and parties vary by program and country, so verify specifics against primary sources. Last reviewed June 2026.