There's no guarantee that individual banks will have enough deposits to cover their liabilities, so they first have to wait until the end of the day in order to

There's no guarantee that individual banks will have enough deposits to cover their liabilities, so they first have to wait until the end of the day in order to clear all transactions made and fix any possible deposit shortfalls by operating on the overnight market getting short-term loans, either from the FED or from other banks. http://www.investopedia.com/terms/o/overnightrate.asp http://www.investopedia.com/terms/o/overnightrate.asp I'm not saying this is the reason why you can't instantly transfer money around, as there could possibly be a better implementation of such a system that allows consumers to do that. I'm just saying what I know.