NEFT vs RTGS Comparison of Online Money Transfer Methods

NEFT RTGS, IMPS, and UPI are all online payment systems.

NEFT is a process where the bank processes transactions in a batch/hour. It has no amount limit of the transaction.

RTGS is the real time gross adjustment, where the transaction occurs between two banks on a real time basis. The quantity restriction is INR two lakh for RTGS.

IMPS is instant transfer, and the maximum amount limit is ₹ 200,000. The transfer takes about 90 seconds usually.

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Banking is a vital part of our lives. Many of us visit banks regularly for cash deposits/withdrawals, cheques, and other services.

There was a time when it would take days to reflect deposited money in someone’s account. The World is racing toward digitalization, and now there are several means for quick fund transfer to another account.
India has two main payment systems:

  1. National Electronic Funds Transfer (NEFT),
  2. Real Time Gross Settlement (RTGS) set by RBI.

Immediate Payment Service (IMPS) and UPI is a comparatively new service for us.


National Electronic Funds Transfer (NEFT):


NEFT has been introduced by the Reserve Bank of India to make funds transfer swift and hassle free. The requirement for this service is that bank should be NEFT enabled, and user’s bank account should be online. It is one of the most commonly accepted ways of sending money online. NEFT is a partial adjustment basis service. The money is sent in hourly batches. There are twelve compacts between 8 am & 7 pm on weekdays & six settlements between 8 am and 1 pm on Saturday.

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There is no upper/lower limit on the volume of transferable money. However, banks may set a limit. SBI, for example, has capped its transfer amount at INR 10 lakh. Charges (as per RBI guidelines) can be given as:

  • Within transactions at target bank branches (beneficiary accounts credit) — Free of charges.
  • Outward transactions at issuing bank branches – charges applicable to the sender.

NEFT transaction timings (Monday – Friday) – 8 A.M to 6.30 P.M.
Saturday – 8 A.M to 12 P.M.

The Process of NEFT:

  1. Your bank branch should be NEFT approved. Check NEFT enabled Banks on RBI website.
  2. Bank will give you login id and password. Register your mobile number/email id with the bank.
  3. Once set up the account, Add the beneficiary to whom you want to send money. You require the name, his account number and IFS (Indian Financial System) code for his bank branch. The IFSC code is available on the RBI website. Alternatively, You can check it here.
  4. After finish adding the beneficiary, you will be asked to wait for 24 hours for activation of the recipient. Till then, you can transfer up to 10000 in the inactive assignee account.
  5. Log in to your bank account, tap ‘Transfer Funds’, choose the beneficiary and transfer money.
  6. It will ask you one-time password sent to your registered mobile number.
  7. The recipient will get the money when the next settlement is listed.

The Cost of Transaction:

The charge ranges between ₹ 2.50 and₹ 25, adding service tax, depending upon the amount you are sending.

The Limitations of NEFT:

This transaction is not immediate. You can not send money anytime you want. The service is available on bank working days only, and that excludes weekends or other bank holidays.


The Real Time Gross Settlement:


Here Real Time’ means the processing of directions at the time of receiving of; ‘Gross Settlement’ indicates the settlement of funds transaction instructions happens independently (on a direction by direction basis).
RTGS is suitable and permissible for high amount transactions. The minimum amount transact-able is INR 2 lakh. There is no upper limit. The transference occurs on a real-time basis during the RTGS business hours. Banks usually takes 20-30 minutes to reflect the transferred amount in receiver’s account.
RTGS is different from NEFT in the settlement period. In NEFT, there are batches for settlement, and if a transfer passes the said time, it will happen at next batch. Transactions in RTGS is continued process during the working hours.

The Process of RTGS:

Just make sure that yours and beneficiary’s account branch is compatible with RTGS system. RTGS enabled Banks list is here. The process is the same as NEFT given above.

The Cost of Transaction:

The RTGS is expensive than the NEFT. The bank charges may vary for each. As per RBI guidelines, it can not surpass ₹ 30 for the transaction of ₹ 2-5 lakh & ₹ 55 for the transaction more than ₹ 5 lakh.

The Limitations of RTGS:

  • Yours and beneficiary’s account branch should be RTGS enabled.
  • All bank branches do not offer this service. The record of the RTGS-enabled bank is here.
  • You can not use the facility on bank holidays and Sundays.

RTGS bank charges are as below (RBI guidelines):

  • Within bank transactions – Free of charge.
  • Now, outward transaction – ₹ 2 lakh to 5 lakh – not more than ₹ 30/transaction;
  • More than ₹ 5 lakh – not more than ₹ 55/transaction.

The RTGS process is open from 9 am – 4.30 pm on weekdays and 9 am – 2 pm on Saturday.

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