With the help of online fund transfer methods or digital payment systems like NEFT, RTGS and IMPS, now bank account holders can send and receive money from anywhere anytime. They don’t have to visit the bank or wait for days to receive money. These digital payment systems in India have made fund transfer from one bank account to another much easier and faster. Today, almost all banks and companies are adopting these payment modes to make their job easier and convenient. Let us discuss the features and differences between these three online fund transfer methods in detail.
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.
|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|
From the year 2020, NEFT transactions can be done 24*7. This step was taken to promote digital transactions and global integration of financial markets.
You can transfer as low as Rs. 1 through NEFT meaning National Electronic Funds Transfer. The maximum NEFT transfer limit depends on the bank. For example, SBI allows up to Rs. 10 Lakhs per day through NEFT, HDFC and ICICI allows Rs. 25 Lakhs per day, and so on.
No, RBI has removed all the applicable charges from 1 January 2021 on online NEFT transactions.
The RTGS timings are very convenient. RTGS system is available on a 24x7 basis on all 365 days in a year. With this flexible RTGS transfer time, the money is transferred to the beneficiary account in real time.
RTGS transfers or transactions have no amount cap. The RTGS limit varies from bank to bank. For example, RTGS minimum amount limit for HDFC is Rs. 2 Lakhs and maximum Rs. 25 Lakhs, ICICI and SBI allows Rs. 2 Lakhs to Rs. 10 Lakhs, and so on.
No charges are levied for RTGS transactions for online transfers. For RTGS meaning Real-Time Gross Settlement, transactions completed at a bank branch, Rs. 15 plus GST is levied.
There are nil charges for NEFT. For RTGS payment, the charges vary from nil (for online transfers) to Rs. 15 + GST (transaction is completed at a bank branch).
You can transfer minimum Rs. 1 to maximum up to Rs. 2 Lakhs through IMPS.
Under IMPS, there are no service charges on transactions up to Rs. 1,000. For transactions from Rs. 1,001 to Rs. 10,000, Rs. 2 + GST will be charged; for transactions of Rs. 10,001 to Rs. 1 Lakh, Rs. 4 + GST is charged; and for amount above Rs. 1 Lakh up to Rs. 2 Lakhs, charges of Rs. 12 + GST are applied.
The faster form of payment between NEFT vs RTGS depends on the urgency and the amount of transaction. For a transaction above Rs. 2 Lakhs, RTGS is a faster and more effective payment mode. However, for lower amount transactions, NEFT is more efficient.
Yes, as RTGS is maintained by the RBI, it is a risk-free method of funds. Transactions are carried out on a real-time basis through RTGS and there is no room for delay.
Presently, NEFT operates in half hourly batches. So, there are 48 half-hourly batches every day. The system is available on a 24 x 7 basis on all days of the year, including holidays.