DEFINITION of 'Clearing House Interbank Payments System - CHIPS'

The primary clearing house in the U.S. for large banking transactions. CHIPS settles over 250,000 of trades per day, valued in excess of $1 trillion. CHIPS and the Fedwire funds service used by the Federal Reserve Bank combine to constitute the primary network in the U.S. for both domestic and foreign large transactions denominated in U.S. dollars.

BREAKING DOWN 'Clearing House Interbank Payments System - CHIPS'

CHIPS differs from the Fedwire transaction service in several respects. First and foremost, it is cheaper than the Fedwire service, albeit not as fast, and the dollar amounts required to use this service are lower. It is also privately owned by member banks and has only 46 members (as of 2006), compared to the approximately 50,000 members that use the Fedwire service. Finally, CHIPS acts as a netting engine, where payments between parties are netted against each other instead of the full dollar value of both trades being sent.

RELATED TERMS
  1. Private Sector Adjustment Factor ...

    A method used by the Federal Reserve Board for calculating the ...
  2. Euro Feds

    A federal wire transmission advancing funds in Eurodollars from ...
  3. Blue Chip

    A nationally recognized, well-established and financially sound ...
  4. Bilateral Credit Limit

    Intraday credit limits set by two institutions for use with one ...
  5. Regulation J

    A regulation set forth by the Federal Reserve. Regulation J establishes ...
  6. Purple Chip Stock

    A term coined by portfolio manager John Schwinghamer to describe ...
Related Articles
  1. Investing

    Banking On Blue Chip Stocks

    Discover what makes blue chip stocks such attractive investments.
  2. Investing

    Apple Undercuts Intel Processor's Role In Next MacBook

    Apple is developing a new chip that will shift the low-power mode functionality from Intel's chips onto its own.
  3. Investing

    5 Things ARM Holdings Wants You to Know (ARMH)

    ARM Holdings (NASDAQ: ARMH), the company that designs and licenses chips based on the ARM architecture, reported its first-quarter earnings a few weeks ago. The results were solid, with both ...
  4. Insights

    What Is The New Credit Card Chip Good For?

    Under current U.S. credit card requirements, credit card issuers are required to issue chip cards as of October 1, 2015. Instead of swiping your card as you do now, you will slide the card into ...
  5. Investing

    3 Key Numbers ARM Holdings Investors Need to Know (ARMH)

    ARM Holdings (NASDAQ: ARMH) has experienced tremendous growth over the past decade as chips built on the ARM architecture have dominated the mobile market, powering the vast majority of smartphones ...
  6. Financial Advisor

    Overview of Fidelity Blue Chip Growth Fund (FBGRX)

    Learn about the Fidelity Blue Chip Growth Fund in this fund overview including information on its investment performance and portfolio managers.
  7. Tech

    Top 5 Holding Analysis of Fidelity Blue Chip Fund

    Learn about the Fidelity Blue Chip Growth mutual fund, its portfolio makeup, and read a complete analysis of the fund's top five holdings.
  8. Investing

    3 Key Numbers Intel Investors Need to Know (INTC)

    With the market for PCs in decline, Intel (NASDAQ: INTC) has been working to broaden its business in recent years. The company has managed to essentially run away with the server chip market, ...
  9. Investing

    What's a Blue-Chip Stock?

    A blue-chip stock is stock of a company that has been operating successfully for many years and has a market capitalization in the billions. Most blue-chip companies are leaders in their industry. ...
RELATED FAQS
  1. What are the main types of chips produced by semiconductor companies?

    Learn about two ways in which chips in semiconductors industry are categorized: by functionality and by type of integrated ... Read Answer >>
  2. Should I care about the book value per common share when dealing with a blue chip ...

    See why shareholders of any listed company, even owners of blue chip stock, should care about what the book value per common ... Read Answer >>
  3. What are direct costs of sales?

    Learn about direct costs of sales and cost of goods sold (COGs), what direct costs of sales measures and how to calculate ... Read Answer >>
  4. How does the Private Sector Adjustment Factor (PSAF) affect competition in the private-sector?

    Look at a simple breakdown of the Private Sector Adjustment Factor (PSAF), set by the Federal Reserve to recover imputed ... Read Answer >>
Hot Definitions
  1. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
  2. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
  3. Tax Refund

    A tax refund is a refund on taxes paid to an individual or household when the actual tax liability is less than the amount ...
  4. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced within a country's borders in a specific time period, ...
  5. Inflation

    The rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of ...
  6. Merchandising

    Merchandising is any act of promoting goods or services for retail sale, including marketing strategies, display design and ...
Trading Center