What is neft and rtgs

Difference between NEFT and RTGS: NEFT VS RTGS

All customers having savings and current account are eligible to use NEFT and RTGS services.

Key Takeaways

Introduction

Mrs Lohia runs a home-based bakery and believes that inter-bank transfer can be an extremely useful and convenient service. It would enable her to pay for her supplies as well as receive payments from her clients. But Mrs Lohia has not been able to avail of these services because she often gets confused by the acronyms like NEFT, RTGS, and IMPS while attempting to transfer funds. While she has some ideas, she is unsure of the difference between NEFT and RTGS and IMPS. This article is for Mrs Lohia and others like her. It is to designed to help the likes of her become well-informed bank customers and take optimum advantage of their banking services.

Different ways of transferring money

In India, there are three different ways in which you can transfer money online. These include the National Electronic Fund Transfer (NEFT), Real Time Gross Settlement (RTGS) and Immediate Payment Services (IMPS). All of these are electronic payment systems that allow you to transfer funds from one bank to another within the country. Of these payment systems, NEFT and RTGS are extremely popular, especially among business owners who need to make large amounts of transactions. It is, therefore, crucial to understand the difference between NEFT and RTGS. Let us begin with the meaning of two types of fund transfers.

What is NEFT?

The acronym ‘NEFT’ stands for National Electronic Funds Transfer. It is a 24*7 available service of funds transfer wherein the transaction gets processed in batches of half an hour. The RBI has not specified any minimum or maximum limit on the transfer amount. All you need to provide is a few details of the beneficiary to initiate an NEFT transfer. The details required for a typical NEFT transfer are the name of the beneficiary, account number and account type, name of the bank, and the Indian Financial System Code (IFSC) of the bank.

What is RTGS?

The acronym ‘RTGS’ stands for Real-Time Gross Settlement. RTGS is a funds transfer system based on a gross settlement concept where money is moved from one bank to another in real-time. RTGS is primarily designed for high transaction amounts. As such, while there is no maximum limit on the transfer amount, you need to transfer a minimum of INR 2 lakhs at a time. RTGS is especially useful when the transaction amount is high, and payment needs to be processed immediately. Like with NEFT, the details required for a typical RTGS transfer are the name of the beneficiary, account number and account type, name of the bank, and Indian Financial System Code (IFSC) of the bank.

NEFT vs RTGS

The RTGS and NEFT difference can be best understood by the way each payment system processes its transactions. While NEFT processes the transactions in half-hourly batches, the transfers via RTGS are processed in real-time on a transaction-by-transaction basis. One can say that the fundamental difference between NEFT and RTGS is that while RTGS payments are based on gross settlement, NEFT payments are based on net settlement.

Let us now understand the NEFT and RTGS difference through different points of comparison. They are as under:

Transaction Charges

In NEFT transactions, no charges are levied if the transfer is done online. However, charges may apply on offline NEFT transactions availed via a bank branch initiating the service. As far as RTGS transactions are concerned, there are no charges levied on this type of fund transfer.

Transaction Timings

When it comes to online RTGS and NEFT transactions, you can transfer funds at any time of the day. Both the services are available and accessible 24×7, 365 days a year. That said, the offline NEFT facility is subject to the rules and timings of specific banks and their branches, responsible for initiating the transfers.

Transaction Limit

As mentioned earlier, no minimum or maximum limit of transfer exists in NEFT transactions. You can transfer anything from INR 10 to INR 1,000,000 per transaction easily and conveniently. However, when it comes to RTGS, there is a minimum limit of INR 2 lakhs per transaction. Once again, there is no maximum limit of transaction with RTGS, and you can transfer any sum of money as needed. It should, however, be noted that banks may place maximum limits based on their own risk perception.

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Understanding the difference between NEFT and RTGS is crucial in choosing which method of transaction suits you best. In case you need to initiate transactions of large sums of money in real-time, RTGS is the better option for you. Conversely, if you have to transfer small amounts without any urgency of clearance, NEFT is the better option.

Both the methods are safe and secure systems of funds transfers and are also monitored by the RBI. Both the services are easily accessible and available 24×7×365 via bank websites, internet banking portals, and mobile applications, downloadable from the Google Play and iOS App Store, on your internet-enabled phones.

Do you need a Bank Account for RTGS and NEFT?

A savings account or current bank account is required for online transactions of both RTGS and NEFT. However, a person having no bank account can also send funds through NEFT. Such a person will have to deposit cash at the nearest NEFT enabled branch of any bank. The transfer can be done to a beneficiary having a bank account with another NEFT enabled bank. There is a maximum limit of INR 50,000 for such transactions.

Conclusion

Online transfer of funds is a vital and essential service in the global banking industry. For India, these payment systems have revolutionised the banking sector of the country and given momentum to the growth of a digital and cashless economy. After understanding different methods of transferring funds online and figuring out the NEFT and RTGS difference, Mrs Lohia has also started sending and receiving payments online. In fact, she believes that this push for digitalisation has made her financials more transparent and secure.

With the digibank by DBS app, you can easily and conveniently initiate RTGS and NEFT transactions. All transactions done via the digibank by DBS mobile app are safe and secure.

*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.

Difference between IMPS, RTGS, and NEFT Payment in India

If you’re a business owner in India who has recently started implementing digital transactions in your business, your knowledge shouldn’t be limited to net banking and card payments. If you’ve heard about NEFT, IMPS, and RTGS, you would already know that they are used to transfer funds from one account to another. However, are you well-versed in the difference between the 3 modes?

Without knowing the difference between the three methods, you had no way of knowing which one would work for you. Let’s fix that. Read on to understand the three methods and how each one can help you. We’ve done the research so you won’t have to.

NEFT (National Electronic Funds Transfer)

With NEFT, you can transfer any amount to the recipient’s account in a one-on-one transfer basis. NEFT transactions don’t have a maximum limit for funds that can be transferred in a single day.

– NEFT transfer timings

The NEFT system is available round the clock throughout the year on all days (24x7x365). Funds are transferred in batches that are settled in 48 half-hourly time slots throughout the day.

– NEFT transfer limits

There is no maximum or minimum limit on the amount of funds that could be transferred through NEFT. With NEFT, you can initiate transactions to transfer funds from one bank account to another throughout India. However, you must make sure that the banks are a part of the NEFT transfer network (another way to say this is that the banks should be NEFT-enabled).

– How to do NEFT transfer

To transfer funds via NEFT, all you have to do is log in to your net banking portal and add the recipient as a beneficiary. You’ll need to enter details like their name, account number, account type and IFSC code under the Add New Payee section. Once you choose NEFT as the preferred mode of transfer and enter the amount to be transferred, the fund transfer will be completed.

RTGS (Real Time Gross Settlement)

Business owners can use RTGS when they need to transfer large amounts instantly. One advantage that RTGS has over the other methods is the transaction speed, since the entire amount is transferred in real time.

– RTGS transfer timings

RTGS is available for customer and inter-bank transactions round the clock — except for the interval between ‘end-of-day’ and ‘start-of-day’ processes (these timings will be duly broadcasted through the RTGS system).

– RTGS transfer limits

There’s a minimum limit of Rs. 2 lakhs for RTGS transactions, and there’s no maximum limit as such.

To get an RTGS-enabled account, you can either contact your bank or check your eligibility status in your online banking portal. If you’re using RTGS for a fund transfer, make sure that both you and the recipient have RTGS enabled accounts.

– How to do RTGS transfer

To transfer funds via RTGS, log in to your banking portal and add the recipient as a beneficiary by entering details like their name, account number, account type, and IFSC code. Then choose RTGS as the mode of transfer and enter the amount to be transferred, and the fund transfer will be completed.

IMPS (Immediate Payment Service)

IMPS is another real-time payment service, but the distinguishing factor is that IMPS is available 24 ⁄₇ and you can avail the service even on bank holidays. Using IMPS, you can transfer comparatively lower amounts, up to Rs. 2 lakhs, instantly.

So, you can think of IMPS as the fund transfer mode that has the best features of both RTGS and NEFT. You can transfer amounts as low as you want, any time you want, with instant results. Though IMPS services are mostly used online, a few banks offer SMS services. Check with your bank to see if they support IMPS transfers via SMS.

The IMPS service is offered by the National Payments Corporation of India (NPCI). Their services allow customers to transfer funds through both banks and Prepaid Payment Instrument (PPI) issuers. PPIs are instruments that allow you to purchase goods and services or initiate fund transfers using the value that is stored in the PPI. Some examples of PPIs include smart cards, magnetic stripe cards, digital wallets, and vouchers. Individuals without bank accounts can transfer funds by IMPS using PPI.

– How to do IMPS transfer

To transfer funds via IMPS, you should first register for the mobile banking service of the concerned bank and generate a Mobile Money Identifier (MMID) and MPIN from the bank. You should make sure that your beneficiary or recipient has the MMID too.

Once you’ve registered, log in to your net banking portal and select IMPS as the preferred mode of transfer. Then you should fill in details like the recipient’s mobile number, the recipient’s MMID, the amount to be transferred, and your MPIN. Once this is done, you will receive a confirmation message via SMS.

Advantages and benefits of online money transfer services

Online fund transfers are reliable, fast, and convenient. Using these services, you can transfer funds easily without having to wait in long queues to withdraw cash or try to be physically present at the bank. They also offer choice and flexibility — if you consider factors like the value of funds you want to transfer, transaction speed, cost and timing, you can select the service that suits your needs best for each transaction.

Still having trouble completing vendor payments?

If you’re using Zoho Books, you can carry out B2B payments right from your Zoho Books account as soon as you receive a bill from your vendor. All you have to do is enter the amount to be transferred, the recipient’s name, and account number. Then choose NEFT, RTGS, or IMPS as the preferred transaction type and click Send. It’s simple! You can even track the status of your transaction (processed or in progress) once you’ve initiated the transfer.

Having an accounting system that incorporates the different online fund transfer modes will simplify your payment process even more. With Zoho Books, you can carry out B2B payments right from your accounting software as soon as you receive a bill from your vendor. You can also offer these convenient payment options to your customers, and get paid quicker. Try our free accounting software today to manage your cashflow with greater cognizance.

NEFT vs RTGS: What’s the Difference?

With the introduction of online modes of payment, and increased technical usage among the users, transferring funds from one bank account to another has become almost like a piece of cake. Users can choose any one of the various modes of payment depending upon the amount to be transferred, the time duration in which it should be credited to the receiver’s bank account, etc.

NEFT and RTGS are two of the many methods of fund transfer available to the users. Both these methods have their own advantages and disadvantages and are suitable for all users, depending upon their requirements.

This blog focuses on the differences between NEFT vs RTGS as modes of fund transfer and explains which one you should choose and why!

Understanding NEFT- National Electronics Funds Transfer

Regulated by the Reserve Bank of India, NEFT or National Electronic Funds Transfer is an electronic method of transferring money online. Most Indian banks provide the NEFT feature on internet banking and mobile banking. Money transfer made through NEFT does not require any additional transaction costs. Transactions made through NEFT are processed in separate batches. The RBI has specified a cut-off within which these transactions are settled.

NEFT is a one-to-one payment facility

NEFT transactions can be processed only between the banks that offer NEFT-enabled services

Transactions made through NEFT do not take place in real-time; implying that it takes a few days for NEFT transactions to complete

Before December 2019, RBI had fixed timings during which NEFT transactions can be processed. Any NEFT transaction will be processed only between 8:00 AM and 6:30 PM from Monday to Friday, and 8:00 AM to 12:00 PM on Saturdays. However, from 2020, NEFT transactions can be performed 24*7

To transfer funds through NEFT, you must add beneficiaries on the internet banking portal of your required bank

There are no limits on the amount of NEFT transactions

There is a fee applicable on all NEFT transactions; the amount varies from Rs. 2.5 to Rs. 25, depending on the amount being transferred

As per RBI guidelines, the payments made via NEFT are processed and settled in batches of half-hour

Understanding RTGS- Real-Time Gross Settlement

RTGS stands for Real-time Gross Settlement, meaning that through this method, the money is transferred from one bank account to the other in real-time, without any delay. RTGS works out as the best payment method if you need to transfer an amount equal to or more than Rs. 2 lakh in real time. RTGS does not follow any specific processing method unlike NEFT; hence, the funds are settled in real-time, without any delay. Through RTGS, each transaction gets processed with every instruction, which makes the money transfer process easier and faster.

Transactions made through RTGS are processed on a one-to-one basis

RTGS facility can be accessed at any time, on any day of the year

The Real Time Gross Settlement method is mostly used for transactions of high value

The RTGS service can be used using both online and offline modes

To process transactions through RTGS, the following details must be provided-

Amount to be transferred

Bank Account number

Beneficiary’s bank branch

Difference between NEFT vs RTGS

The following are the key differences between NEFT and RTGS-

Point of Difference

Minimum Amount to be Transferred

Maximum Amount to be Transferred

Type of Settlement

Amount settled in batches

Amount settled one-on-one

24*7, all 365 days

Varies from bank to bank

Mode of Transfer

Both- online and offline

Both- online and offline

No charges applicable

Rs. 30 on outward transactions between Rs. 2 lakh and Rs. 5 lakh; Rs. 55 on outward transactions of more than Rs. 5 lakh

Charges on Transactions: NEFT vs RTGS

Additional Charges on NEFT Transactions-

NEFT transactions involved the following additional charges as money transfer fee until December 2019-

Less than or equal to Rs. 10,000

Between Rs. 10,000 and Rs. 1 Lakh

Between Rs. 1 Lakh and Rs. 2 Lakh

Equal to or more than Rs. 2 Lakh

However, from January 2021, RBI has removed all the applicable charges on online NEFT transactions. This initiative was taken to promote digital transactions. RBI stated that with effect from 1 January 2020, no banks shall levy any charges from their savings account holders on online fund transfers done through NEFT (National Electronic Funds Transfer) system.

Additional Charges on RTGS Transactions-

The following charges are applicable on transactions made through RTGS-

Type of Transaction

Online transactions (Internet/Mobile Banking)

Outward transactions (amount = Rs. 2 lakh – Rs. 5 lakh)

Outward transactions (amount < Rs. 5 lakh)

NEFT vs RTGS: Which is Better?

Looking at the above-mentioned differences, it is evident that NEFT and RTGS are two majorly different modes of fund transfer. While NEFT has no minimum or maximum limit on the amount to be transferred, RTGS transactions can only be performed if the amount to be transferred is equal to or more than Rs. 2 lakh. Similarly, NEFT transactions take around 2 hours to be processed, while RTGS transactions are processed immediately.

So, if you are to make a choice between both these payment options, you can choose any one on the basis of your requirements explained as below-

You may go for NEFT as the mode of fund transfer if you have to transfer a small amount and there is no urgency for the completion of the transaction

Alternatively, if you wish to transfer a huge amount of money and on an immediate basis, then RTGS should be your preferred mode of fund transfer

To Conclude:

Irrespective of whichever method you choose, it is important to note that both these methods are equally safe and secure and are governed by the Reserve Bank of India. Both, NEFT and RTGS are reliable payment systems that support the digital, cashless initiative in building an advanced economy in the country.

Difference between NEFT and RTGS | What is NEFT and RTGS, NEFT vs RTGS

Difference between NEFT and RTGS

When conversing about banking transactions and terminology, NEFT and RTGS come to mind as the widely used banking methods. However, do you have detailed or complete information about them?

To provide a better understanding, we have included the difference between NEFT and RTGS along with their differences from UPI, Net Banking, Fund Transfer, EFT, Bank Transfer, IMPS, and more.

Therefore, in this write-up, we endeavor to make you know about NEFT and RTGS. We have included plenty of information for you to understand the topic in detail.

Here you will go through the meaning, features, advantages, and disadvantages of NEFT and RTGS.

Alongside, explore the limits of the transaction, amounts transferable, availability, time takes, and more about NEFT and RTGS.

What is NEFT?

National electronic fund transfer or NEFT is designated as a nationwide payment system allowing the transfer of funds from one bank account to another.

With the focus on increasing online banking, NEFT has emerged as one of the most popular ways of transferring funds.

Through NEFT, funds can be electronically transferred from any bank branch to any individual eliminating the need of visiting a bank branch to transfer the funds.

The primary benefit offered by NEFT is the transferring of funds from any account of any branch to any other bank account located at any place across the country.

However, both the receiver and sender branches should be NEFT-enabled.

Under the NEFT system, one-way cross-border transfer of funds from India to Nepal is also facilitated under the Indo-Nepal remittance facility scheme.

NEFT Timings

National electronic fund transfer works based on the deferred settlement which is designated as the transaction which is carried out in batches. The Reserve Bank of India has regularized the NEFT transactions by making them available 24*7 on all days of the year which includes holidays as well.

Earlier common NEFT transactions are available during a time frame of 8 a.m. to 6:30 p.m. only from Monday to Friday.

Who can make NEFT Transactions?

A list of the participating Bank branches is provided by the Reserve Bank of India which is NEFT-enabled. This means that an individual can practice NEFT transactions through the bank branches.

Any individual, firm or corporation holding a bank account with the participating branch can initiate an NEFT transaction anytime.

In an instance of an individual does not hold a bank account, an NEFT transaction can be made by making a cash deposit and providing the complete details required. However, the limit of such transactions is capped to ₹50000.

What are NEFT charges?

The recipient or beneficiaries are not charged for the inward transfers. The charges applicable for the remitter for fund transfer are as follows:-

What is RTGS?

Real-time gross settlement (RTGS)refers to a fund transfer mechanism allowing the real-time processing and settlement of requests for fund transfers.

Through this system, it can be ensured that the receiver gains access to the funds almost instantly rather than after a specific duration which is the case in some other payment methods.

The settlement of requests under RTGS takes place on an instructions basis rather than on a batch-clearing basis. The central bank of the country tracks all the transfers through this method which makes all the successful transfers irreversible.

For initiating an RTGS request, the individual is required to provide certain details to the bank or branch which includes the name of the beneficiary the amount to be remitted, the account number of the beneficiary, account number of the sender, the contact information along with other details if needed such as the IFSC code.

RTGS Operating Windows

According to the guidelines issued by the Reserve Bank of India, RTGS requests can be placed on weekdays which start from 9 a.m. until 4:30 p.m.

On working Saturdays, the timing change is from 9 a.m. to 2 p.m. These timings are provided by the Reserve Bank of India for initiating the transactions.

However, the actual timings might differ depending on the timing they are open to the customers.

What is the limit of RTGS?

Reserve Bank of India has set rules and regulations according to which an RTGS request cannot be initiated for transactions below ₹2 lakh.

On the RTGS based fund transfer, there are no upper limit restrictions set by the Reserve Bank.

What are RTGS charges?

RTGS requires some charges to be paid to initiate a request and the receiving end of the fund transfer face is no charges.

Moreover, as per the new guidelines issued by the Reserve Bank of India, RTGS transactions made between 8 a.m. to 11 a.m. will face no charges.

RTGS transactions initiated between 11 a.m. to 1 p.m. will be charged at ₹ 2 why the transactions initiated after 6 p.m. the charges will be ₹ 10.

Which is better – NEFT or RTGS?

The preference for NEFT or RTGS depends on various factors which are as follows:-

Timing

The facility for initiating NEFT transactions is available 24*7 on all days of the year including the holidays.

However, the RTGS facility is available on weekdays from 9 a.m. to 6 p.m. only. On working Saturdays, the timing changes and can be initiated from 9 a.m. to 2 p.m.

Limit

There is no minimum order maximum limit for initiating NEFT transactions. However, for initiating RTGS transactions, the minimum limit is 2 Lakhs.

Transfer

The transfer of funds in NEFT is done in batches; this means that the funds are not immediately transferred when the request is made.

In RTGS transactions, the funds are transferred from the sender to the receiver on a real-time basis.

Therefore, after ascertaining these factors, one can determine which fund transfer method is the best for them.

What will happen if NEFT is done after 7 pm?

The Reserve Bank of India has decided to make the NEFT money transaction facility available 24*7 including the holidays on all days of the year. Until now, the facility of NEFT was not available on banking holidays.

Earlier, the NEFT transactions were selected between 8 a.m. to 7 p.m. the settlement time is 8 a.m. to 1 p.m. on the 1st and 3rd Saturday.

Therefore, the NEFT transactions can be initiated even after 7 p.m.

Is NEFT available 24 hours?

Yes, the NEFT fund transfer facility is available on all days of the year at every time of the day.

This means that NEFT transactions can be carried 24*7.

Is NEFT transfer immediate?

NEFT transfer is done in batches as it has fixed batch time slots. Through this, it can take approximately 2 hours for the receiver to receive the funds.

Therefore, the money transfer in NEFT payment is not immediate rather it is done in batches that are done at regular intervals which are not too far apart.

Can RTGS be done at night?

The Reserve Bank of India has issued guidelines regarding the RTGS operating windows. According to the guidelines, RTGS requests can be made on weekdays from 9 a.m. until 4:30 p.m.

This timing is a little different on working Saturdays which is from 9 a.m. until 2:00 p.m. However, the actual timings vary to a certain extent depending on the timing they are available to the customer.

Can RTGS be done on Sunday?

RTGS transactions can be initiated or requested from Monday to Friday between 9 a.m. to 6 p.m. and on working Saturdays between 9 a.m. to 2 p.m.

Therefore, these transactions cannot be initiated on Sundays.

Can I transfer 1 crore through RTGS?

As per the Reserve Bank of India, the RTGS money transfer system is primarily for high-value money transfers or transactions.

The minimum amount which can be remitted through RTGS is ₹ 2 lakh with no cap on the maximum limit.

Therefore, any individual wishing to initiate a money transfer request of one crore through Real Time Gross Settlement system can do so.

What is the Fund Transfer?

Fund transfer is designated as the movement of the funds or money from one bank account to another or from the sender to the receiver account.

Fund transfer can be initiated through various modes such as National Electronic Fund Transfer, Real-time Gross Settlement, Immediate Payment Service, Unified Payments Interface, Electronic Fund Transfer, Net banking, Bank transfer, and more alternatives that are available.

What are the advantages and disadvantages of NEFT?

Advantages of NEFT

Disadvantages of NEFT

What are the advantages and disadvantages of RTGS?

Advantages of RTGS

Disadvantages of RTGS

With the advantages of RTGS, there are certain disadvantages of the payment system as well which are as follows:-

Which is free – NEFT or RTGS or IMPS?

In National Electronic Fund Transfer and Real-Time Gross Settlement systems, a certain amount of fees is charged depending on the number of transactions made through the system.

Moreover, in Immediate Payment Service or IMPS, there is also a certain amount of fee charged depending on the amount of the transaction.

Therefore, none of NEFT, RTGS, and IMPS is free of cost. A fee is charged in every transaction made through these systems.

Difference between NEFT and RTGS

The major points of difference between National Electronic Fund Transfer and Real-time Gross Settlement are discussed as follows:-

What is UPI?

UPI or Unified Payments Interface refers to a single platform merging various banking services and features in one roof.

It is designated as an immediate real-time payment system that assists in instantly transferring the funds from one bank account to another through a mobile platform.

In this, a UPI ID and PIN are the only requirements to initiate a transaction. Payment through UPI can be made through a mobile number or a virtual payment address.

Who initiated the Unified Payments Interface or UPI?

UPI was an initiative that was undertaken by the National Payments Corporation of India (NPCI) along with the Reserve Bank of India and the Indian Banks Association (IBA).

The National Payments Corporation of India holsters the responsibility of handling the RuPay payment infrastructure by allowing different banks to interconnect and transfer the funds.

What is a PIN and UPI ID?

A UPI Id indicates a unique identification of the account holder or user for a bank account that will be used for sending and receiving the funds.

UPI PIN, on the contrary, is a 4-digit personal identification number used while making payments or bank transfers.

It is entered for authorizing the transfer of money through UPI mode. UPI PIN is chosen or set by the user or account holder.

How does UPI or Unified Payments Interface work?

Difference between NEFT and UPI

The major points of difference in NEFT and UPI are discussed as follows:-

What is IMPS?

IMPS or Immediate Payment Service is designated as an instant interbank electronic funds payment transfer system in the country.

This money transfer mechanism was introduced by the Central Bank of India and the National Payments Corporation of India. This mechanism initiated was initiated by NPCI in 2010 with the help of a pilot project with four major banks which has now grown to more than 150 banks.

Regarded as one of the major features of the money transfer mechanism, it is available at all times for use. In case of emergencies, it serves as a great banking platform and enables the instant transfer of funds.

The nominal charges and a transfer limit on the transaction through the immediate payment system. The transfer limit is around ₹ 2 lakh per day. This money transfer mechanism is also available on mobile phones making it super convenient.

The management responsibility of the IMPS fund transfer mechanism is held by the National Payments Corporation of India. The Reserve Bank of India regulates its mechanism alongside.

Features of IMPS

How to initiate a transaction through IMPS

Difference between NEFT, RTGS, and IMPS

The major points of difference in NEFT, and IMPS are discussed as follows:-

What is Net banking?

Net banking, internet banking or online banking indicate the facility with the banks and financial Institutions offered to their customers enabling them to use the banking services over the internet.

This eliminates the need of the customers to visit the bank branch office to availing even the smallest services. However, not all account holders get access to internet banking.

To obtain access to internet banking you should register for the facility while you open the account or anytime later.

The facility can be accessed by using the registered customer ID and password required to log into the internet banking account.

Features of Net or Online banking

Advantages of Net Banking

Disadvantages of Net Banking

Difference between NEFT, RTGS, and Net Banking

The major points of difference in NEFT, RTGS, and Net banking are discussed as follows:-

What is EFT?

EFT or Electronic Fund Transfer signifies the system of money transfer from one bank account directly to another bank account. The special feature of the facility is that it does not need any paper money changing hands.

It refers to any transfer of funds that is initiated through the electronic terminal and is used for both credit transfers and debit transfers.

Direct deposit is deemed one of the most widely used electronic fund transfer programs in which the payroll can be deposited straight into the bank account of the employee.

Types of EFT

There are certain types of electronic fund transfer or EFT which we have discussed as listed below:-

Direct Deposit – It enables the businesses to make payments to their employees in which the employees specify the financial institution to receive the payment

Wire Transfer – It is generally used for non-regular payments like making a down payment on a house

Automated Teller Machines – ATMs allow the users to withdraw, deposit, transfer funds and check the account balances at multiple locations in which it is set up

Pay-by-phone systems – Payment of bills or transfer of money can be done over the phone through this service

Debit cards – Users have the option to pay for transactions and the money paid will be deducted from the account which is associated with the debit card

Online banking – Online banking can be accessed by users through the internet on various devices

Difference between NEFT and EFT

The major points of difference in NEFT and EFT are discussed as follows:-

What is Bank Transfer?

Bank transfer is designated as the form of electronic payment in which you can send money directly from one bank account to another.

Working on a bank account transfer is done when an individual instructs the bank to send money directly into another bank account on his or her behalf. This is generally done electronically through online banking.

Bank transfer is a very safe and familiar alternative for customers who desire to pay online. Moreover, bank transfers are highly accessible with people having access to internet banking.

Above all, a bank transfer is a general term that is used to cover a wide range of credit transfers which include cash payments, giro-payments, and wire transfers to the local banks as well.

Any person can initiate a bank transfer through one of the following methods:-

Bank transfer is generally characterized as the initiative of the customer which pushes the payment into the bank account of the seller.

Also, an order is not considered a payment always, as the customers are required to instruct their banks for initiating the payment.

Benefits of bank transfer

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NEFT vs IMPS vs RTGS: All you need to know

Aman Saxena

When it comes to domestic money transfers in India there are three different acronyms that are important to know- NEFT, IMPS, and RTGS. While all are online money transfer services provided through Indian banks, each operates with different types of settlements, different timings, and transaction limits. So we’re here to make it easier to understand what all three mean and when to use each.

What is NEFT

NEFT stands for National Electronic Funds Transfer. It lets individuals, companies, and organizations do one-to-one bank transfers digitally. So even if you and your recipients are associated with different banks, you can still deposit directly into their bank account using NEFT. The system only works however if both banks are NEFT-enabled, although most banks in India are these days. There is no maximum or minimum amount that can be sent using NEFT, unless you are doing an in-person cash-based remittance within India where the cap is ₹50,000.

To start, you will need to make sure you have your recipient’s bank account information as well as their bank’s IFSC, or Indian Financial System Code, a unique identifier for their bank branch. There are no charges to receive money, and the RBI recently launched a push to not have any charges on doing an NEFT transfer too.

Settlements run on the half-hour between typical banking hours, 8 am-7 pm. So all settlements are done on a 30-minute basis in batches. So all the transfer requests received within those 30 minutes are processed together. After that, your recipient can expect the funds within 2 hours from the batch settlement. They’ll be notified by email or SMS.

NEFT is simple to use and can be applied for sending money to your friends or family, making payments or paying rent. As long as you have the money in your bank account, there are no limits on how often you can use it, so from small transfers like settling dinner’s bill to paying for a house.

One last note, NEFT can be used to transfer from and to an NRE/ NRO account within the country. But NEFT is not available for international transactions.¹

What is IMPS

When Immediate Payment Service, or IMPS, came along it changed how and when someone can do a domestic transfer. It is a real-time fund transfer service that grants instant interbank transfers from your bank account using your banking app, mobile payment, ATM, SMS or at the branch. Similar to NEFT, your bank will need to be a participating member of IMPS. There are currently 498 member banks so there is a high likelihood your bank will be a member.²

While NEFT and, as you’ll see, RTGS, are dependent on banking hours, IMPS allows for transfers 24 hours a day, 7 days a week, 365 days a year. So with IMPS, at any time the money can be debited from your bank account and credited to the beneficiary bank account instantly. You can use IMPS by using either your recipient’s

IMPS is great to use for immediate transfers that you can do at any time. So whether it is a weekend, early in the morning or a holiday, you can transfer money to your friend or payee. Plus you can do it with just their mobile number. But to note, to send by only using the mobile number requires that your beneficiary is set up and registered to do so. Otherwise, the other options are available.

Charges for using IMPS are dependent on the bank you are using, however, State Bank of India recently waived their fees for the service.³ Similarly, the bank decides what the minimum and maximum transaction limits are for IMPS. But typically, the minimum is ₹1 and the maximum is around ₹200,000 but check with your bank first.⁴

What is RTGS

RTGS stands for Real-Time Gross Settlement. It is another option for online money transfer with your bank account. RTGS transfers happen in real-time and the settlement is not done in batches but on a one by one basis. There are 140,000 RTGS-enabled bank branches in India.⁵

Similar to the other options, this is a safe and secure system to transfer money in India. Unlike IMPS, RTGS only settles during banking hours. So if its a bank holiday or after working hours, your transfer has to wait until the bank opens back up. And the fees are not set by the Reserve Bank of India, so the banks are free to decide their own charges for the service.

Unlike the other two options, RTGS is primarily reserved for large transactions as the minimum per transfer is ₹200,000. What you will need for a transaction is:

Once it is submitted online or through your banking app, the beneficiary’s bank account must be credited immediately or within 30 minutes.⁶

Since the baseline amount to send with RTGS is ₹200,000 and there is no maximum cap on how much you can send, any of your large payments can be done this way. Whether you are receiving rent or security deposits, or you need to pay for educational expenses to a bank account, you can use RTGS through your bank.⁷

What is the difference between NEFT, IMPS, and RTGS

Here is a break down the major differences between the 3 online bank transfer options.

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Sources used for this article

All sources checked as of 26 September, 2019

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