Difference Between NEFT, RTGS & IMPS
With digital payment systems like NEFT, RTGS, and IMPS, bank account holders can transfer money anytime, anywhere without visiting a branch. These methods have made fund transfers faster, easier, and widely adopted by banks and businesses. Let’s explore their features and differences in detail.
Methods to Transfer Fund Online
There are various methods of transferring money online in India, such as UPI, digital wallets, etc. However, three most commonly used methods of online fund transfer are NEFT, RTGS, and IMPS. NEFT and RTGS were introduced by the Reserve Bank of India (RBI) and IMPS was introduced by NPCI or National Payments Corporation of India.
NEFT: NEFT full form is National Electronic Funds Transfer. It is an online payment system that enables one-to-one fund transfer. You can electronically transfer money from your bank account to the bank account of another person with NEFT. NEFT based fund transfers do not happen in real-time. Fund transfer through NEFT settles in 23 half-hourly batches and that is the main RTGS and NEFT difference.
RTGS: RTGS full form is Real-Time Gross Settlement. It is another online payment system wherein the money is credited to the beneficiary’s account in real-time. The main difference between NEFT and RTGS is that RTGS is primarily meant for transactions of large value that require immediate clearing.
Immediate Mobile Payment Services (IMPS): The IMPS full form is an instant real-time inter-bank fund transfer system. It is managed by National Payment Corporation of India (NPCI). Unlike NEFT and RTGS, IMPS is available 24x7 throughout the year including bank holidays.
Comparison between NEFT, RTGS and IMPS
| Category | NEFT | IMPS | RTGS |
| Full Form | NEFT stands for National Electronic Funds Transfer | IMPS stands for Immediate Mobile Payment Services | RTGS stands for Real-Time Gross Settlement |
| Settlement Time | Half hourly batches | Real-time | Real-time |
| Minimum Transfer Limit | Rs. 1 | Rs. 1 | Rs. 2 Lakhs |
| Maximum Transfer Limit | Rs. 1 | Rs. 2 Lakhs | No limit |
| Service Timings | 24×7 365 days | 24×7 365 days | 24×7 365 days |
| Transaction Charges | Nil for inward transactions done for credit to beneficiary accounts at destination bank branches | Decided by the individual member banks & PPIs. | Nil for inward & online transactions For outward transactions: Up to Rs. 25 for Rs. 2 Lakhs to Rs. 5 Lakhs and up to Rs. 50 for above Rs. 5 Lakhs. GST is also applicable |
| Payment Options | Online & offline | Online | Online & offline |
Things to Know Before Fund Transfer
- The Reserve Bank of India has waived the processing charges for RTGS transactions.
- Inward transactions : It is free, that is, no charge has to be imposed.
- There will be charges for outward transactions. Up to Rs. 24.5 for transactions between Rs. 2 to 5 Lakhs and up to Rs. 49.5 for transactions above Rs. 5 Lakhs.
- Customers have to provide some information to the bank for initiating an IMPS, NEFT or RTGS remittance. This includes the amount to be remitted, and name, account number and bank branch with IFSC code of the beneficiary, and so on.
- if there is a mismatch between the IFSC code and account number, the system will not accept the entry.
- After adding a beneficiary, there is a cooling period of 30 minutes within which you cannot transact.
- During the 30 minutes cooling period, some banks send text notifications to customers on their registered mobile numbers for confirming the account number of the beneficiary being added. Reconfirmation of the account number can be done by customers again at this stage.
- As per RBI, the responsibility to provide correct information in the payment instructions rests with the remitter or originator.
Reshma Rawat is a passionate writer, with a decade of experience in writing for a variety of domains (finance, technology, lifestyle, e-commerce, real estate, etc.). Currently, she is working as Assistant Manager - Content @MyMoneyMantra, and writes blogs & webpages on financial products (loans, credit cards, insurance, financial policies by government, mutual funds, etc.
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