When it comes to transferring money online from one account to another, most banks provide multiple options based on various factors and customer’s requirements. Currently in India, online fund transfer happens either with NEFT, RTGS or IMPS as these are the three different and widely used payment avenues offered by the banks. All three modes make online fund transfer easy, quick and secure yet have different kinds of features and flexibility. Based on the value of the transaction, the speed of transfer, service availability, and other factors, each one of the fund transfer facilities is different from one another. So, are you well-versed in the difference between the 3 modes? Know the difference and insights about these three fund transfer methods.
Difference Between NEFT, RTGS & IMPS
|Basis of Comparison||NEFT||RTGS||IMPS|
|Minimum Transfer Value||Re.1||Rs.2 lakh||Re.1|
|Payment Options||Online & Offline||Online & Offline||Online|
|Maximum Transfer Value||No Limit||No Limit||Rs.2 lakh|
|Fund Transfer Speed||2 hours (subject to cut-off timings and batches)||Immediate||Immediate|
|Settlement Type||Half Hourly Basis||Real Time||Real Time|
|Service Timings||8 am-7pm working days (except 2nd & 4th Saturday)||8 am-6pm (for working days)||Available 365 Days:24/7|
|Inward Transaction Charges||No Charges||No Charges||Decided by Individual Member Bank PPls|
Key Factors That Differentiate the NEFT, RTGS & IMPS
- Timing: The available hours for each type of fund transfer depend on the individual bank and their customer service schedule. NEFT and RTGS services will be unavailable on weekends and bank holidays, while IMPS services can be availed round the clock. Also, NEFT transfers funds in timed batches, while RTGS and IMPS are real-time transfer modes.
- Transaction Limit: This is one of the most important differences. NEFT and IMPS have no minimum value, while RTGS has a minimum fund value of Rs. 2 lakhs. Each mode has a different maximum fund limit.
- Service Fee: The fee charged for the fund transfer transaction varies between the three modes. RTGS is comparatively expensive, while NEFT and IMPS are less so.
- Transaction Speed: NEFT has fixed batch time slots and can take around 2 hours for the recipient to receive the funds, whereas RTGS and IMPS transfers take place in real time and are usually complete within minutes.
What is NEFT (National Electronic Fund Transfer)
The funds transferred under this method are settled in batches (based on Deferred Net Settlement (DNS) and at a specific time of the day. If the transfer is initiated beyond the cut-off time specified by RBI, the funds are typically settled on the next working day. One of the biggest advantages of NEFT is the cost-effectiveness, an individual can carry out smaller value transfers without worrying about the transaction fee and service charges. A smaller fee on the transfer enables the individual to carry out more payments which makes NEFT the most popular and extensively used method for online fund transfers.
Under NEFT, the transactions can be initiated and settled from the bank account of one particular bank to another bank’s account throughout India at no additional cost apart from the standard charges, provided both the banks are a part of the NEFT transfer network (NEFT-enabled). Though some banks might have their own policies concerning the NEFT service provided by them, such as restrictions on transferring funds immediately to a newly added beneficiary, fund value limits restricting the value of transfer beyond a specified limit, etc., these protocols are proven to be effective for safeguarding the customer’s financials.
What is RTGS (Real Time Gross Settlement)
This type of transfer method is applicable and available for fund transfers of a minimum of Rs.2 lakh and there is no upper limit, however, the biggest advantage for RTGS is the fastest/real-time settlement factor. As soon as the transfer instructions are sent, the fund gets settled almost immediately. However, in order to take advantage of the RTGS facility, both the originator’s and the beneficiary’s account has to be RTGS-enabled. Even though most banks are a part of the vast and popular RTGS transfer network facilitated by RBI, individuals are recommended to either get in touch with their bank directly or refer to their online banking section to discover their eligibility concerning access to RTGS payment system. The transaction fee under RTGS is higher than the other methods due to the faster settlement speed performed on an instruction by instruction basis.
RTGS comes with limits on the minimum; however, there’s no maximum fund value and it is efficiently used in situations where individuals and businesses require immediate settlement of high-value funds that are well within the specified limits. Efficiency, speed, and reliability factors are few among the many factors that make RTGS as one the most-sought medium of online fund transfers.
What is IMPS (Immediate Payment Service)
Also known for being one of the popular and fastest methods of fund transfer, IMPS is used widely across most banks. Unlike other methods of fund transfer that become unavailable on bank holidays and during off working hours, IMPS functions 24/7 allowing a fund transfer at any time of the day. Similar to NEFT, IMPS also allows the transfer of low value-funds but what makes it unique is, it immediately settles the funds. NEFT functions as more or less the combined version of NEFT and RTGS, where remitters are neither worried about the size of the fund and service availability nor do they have to be concerned about the settlement speed.
IMPS facility is provided only on the internet and online banking services. Few banks may offer SMS-based IMPS service to mobile banking users. Many of the digital wallets in India utilise IMPS services to credit the money from an individual’s wallet to his/her bank account. Though IMPS provides an immediate fund settlement facility, the transaction fees are as low as NEFT.
Benefits of Online Fund Transfer:
- 24/7 Available
Things to Keep in Mind Before Initiating an Online Fund Transfer
- Timings: The timings for each type of fund transfer methods are specific to the bank. Since NEFT and RTGS are largely based on the bank’s hours of operation, depending on the location and specific working hours, the service availability may differ for either of the parties involved in the fund transfer.
- GST: GST is applicable on the transaction fee as per the latest norms which are subject to change.
- Transaction Fee: A fee is charged for initiating the transfer and not for receiving the funds.
- Transfer Network: The remitter needs to check whether the beneficiary’s account is eligible to receive funds or not since the bank might not be a part of the transfer network.
Quick Tip: Before initiating a transfer using any of these modes, read the applicable conditions and rules (if any). Consult your bank in case of queries and verify the details with a bank official to stay on the safer side.
Frequently Asked Questions (FAQs)
Q.What is the minimum amount for an IMPS transfer?
A.The minimum amount transferable through an IMPS transfer can be as low as Re.1. The maximum amount which can be transferred through IMPS transfer is Rs.2 lakh. IMPS transfers are not trackable and any amount more than Rs.2 lakh will require an RTGS transfer.
Q.Are there any extra charges for an IMPS transfer?
A.The Finance Ministry of India, in order to encourage digital transactions, has removed any kind of additional fee for an IMPS mode of money transfer. However, there are additional charges for NEFT transfers which start from Rs.2.50 for a transaction of up to Rs.10,000.
Q.Which mode of payment between NEFT or RTGS is faster?
A.The faster form of payment depends on the urgency and the amount of your transaction. If you have a transaction above Rs.2 lakh, RTGS is a faster and more effective mode of payment. However, for any payments which are of lower amounts, NEFT is a more efficient mode of payment.
Q.Is RTGS mode of payment safe?
A. RTGS is a highly safe and secure mode of payment which is monitored by the government. It is even more secure as it is used majorly for money transfers of higher amounts. RTGS is available for all the days of the week including Saturdays.
Q.How many times can NEFT transactions be done in a day?
A. NEFT transactions can be made at any time of the day between 8 a.m. to 6:30 p.m. There is no limit to the number of NEFT transactions in a day however, for every NEFT transaction, a maximum of Rs.50,000 can be done at one time.