IMPS vs NEFT vs RTGS – Limit, Charges & Timing

Account holders no longer have to wait for days to get money in their bank accounts because money can be sent and received in an instant from anywhere using the latest digital payment technologies like NEFT, RTGS, and IMPS.

There are numerous methods for transferring money, including UPI, digital wallets, checks, and so on. This blog will focus on some of the most common methods, including RTGS, NEFT, and IMPS, as well as a full comparison of NEFT, RTGS, and IMPS.

What Is NEFT?

Full form: NATIONAL ELECTRONIC FUNDS TRANSFER (NEFT)

NEFT is an electronic payment system designed by the Reserve Bank of India to simplify the transfer of payments from one bank to another in India. It is a safe, cost-effective, dependable, and efficient method of transferring payments between banks.
When transferring funds, the remitter must provide the following information: the beneficiary’s name and account number, the name of the bank/branch, and the IFSC code of the beneficiary branch.

• NEFT is a one-to-one payment method.
• NEFT transactions can only be executed between banks that offer NEFT-enabled services.
• NEFT transactions do not occur in real-time, suggesting that they take a few days to complete.
• Prior to December 2019, the RBI had set times within which NEFT transactions could be executed. Any NEFT transaction will be handled only between 8:00 AM and 6:30 PM Monday through Friday, and 8:00 AM to 12:00 PM on Saturdays. However, starting in 2020, NEFT transactions will be available 24 hours a day, seven days a week.
• To transfer cash via NEFT, you must first add beneficiaries to your necessary bank’s internet banking portal.
• There are no restrictions on the number of NEFT transactions that can be made.
• All NEFT transactions are subject to a fee, which ranges from Rs. 2.5 to Rs. 25, depending on the amount sent.
• Payments made through NEFT are processed and paid in half-hour batches, according to RBI norms.

How NEFT transactions work

• Access your internet banking account.
• Click ‘Fund transfer’ on the main page.
• Select ‘NEFT’ from the drop-down selection that opens.
• If you haven’t previously, you must ‘Add beneficiary’ to the list of beneficiaries in your account.
• To add a new beneficiary, go to the page and click the ‘Add beneficiary’ button.
  Enter the beneficiary’s details, such as his or her name, bank account number, IFSC, and so on.
• Select ‘Confirm’ or ‘Add’.
• To complete this step, enter the OTP that was issued to your registered mobile number.
• After that, your action will be processed. Adding a beneficiary will take around 24 hours.
• Once the beneficiary has been added to your account, you must pick the beneficiary details (to whom the money must be sent) from your list of beneficiaries.
• Enter the amount to be transferred and confirm the transaction.
• When you click ‘Confirm,’ the money will be sent from your bank account to the others.

What Is RTGS?

Full form: Real Time Gross Settlement

RTGS stands for Real Time Gross Settlement and is defined as a system that allows for the continuous and real-time settlement of fund transactions on a transaction-by-transaction basis (without netting). ‘Real Time’ refers to the processing of instructions at the time they are received; ‘Gross Settlement’ refers to the individual settlement of funds transfer orders.

• RTGS transactions are processed one-to-one.
• The RTGS capability is available at any time and on any day of the year.
• The Real Time Gross Settlement method is typically utilised for high-value transactions.
  The RTGS service is available both online and offline.
• Because it is regulated by the Reserve Bank of India, RTGS is a safe and secure method of transmitting cash.
• RTGS enables funds to be transferred in real-time.
• There are no additional fees for RTGS transactions.
• RTGS services are available 24 hours a day, 7 days a week.
• RTGS transactions can be initiated from anywhere utilising online banking.
• Because all RTGS transactions are legally backed, there is little chance of fraud.

How RTGS transactions work

• Access your internet banking account.
• Click ‘Fund transfer’ on the main page.
• Select ‘RTGS’ from the drop-down selection that opens.
• If you haven’t previously, you must ‘Add beneficiary’ to the list of beneficiaries in your account.
• To add a new beneficiary, go to the page and click the ‘Add beneficiary’ button.
  Enter the beneficiary’s details, such as his or her name, bank account number, IFSC, and so on.
• Select ‘Confirm’ or ‘Add’.
• To complete this step, enter the OTP that was issued to your registered mobile number.
• After that, your action will be processed. Adding a beneficiary will take around 24 hours.
• Once the beneficiary has been added to your account, you must pick the beneficiary details (to whom the money must be sent) from your list of beneficiaries.
• Enter the amount to be transferred and confirm the transaction.
  When you click ‘Confirm,’ the money will be sent from your bank account to the others.

What is IMPS?

Full form: Immediate Payment Service

IMPS is another real-time payment service, however, it differs in that it is available 24 hours a day, seven days a week, including bank holidays. You can rapidly send smaller sums, up to Rs. 2 lakhs, using IMPS.

As a result, consider IMPS to be the fund transfer option that combines the greatest qualities of both RTGS and NEFT. You can transfer as little as you want, whenever you want, with quick effects. Though most IMPS services are utilised online, a few banks also provide SMS services.

• The daily maximum limit for IMPS transactions is Rs. 1 lakh.
• The charges for IMPS transactions range from Rs. 5 to Rs. 15, depending on the bank’s terms.
• An extra service tax may be levied on IMPS transactions.
• Immediate payment service is a strong, real-time fund transfer alternative that provides inter-bank fund transfer services 24 hours a day, seven days a week.
• IMPS allows for the immediate movement of funds between banks across the country, which is both safe and cost-effective for all customers.
• The instant payment solution is available on both online banking and mobile platforms.
• This instant payment option is available at all times, including public and bank holidays.
• Users can only add beneficiaries using IMPS mobile platforms by supplying the recipient’s mobile number and MMID (Mobile Money Identifier)
• Mobile phone MPS transactions do not require bank account numbers.
• The bank promptly notifies both the payer and the payee when an IMPS transaction is completed.
• IMPS can be used to accept payments, make payments to other merchants, perform mobile banking activities, and so on, in addition to transferring money from one bank account to another.

 How IMPS transactions work

• Log in to your mobile banking or internet banking account.
• Click the ‘Fund Transfer’ option on the main page that opens.
• Choose ‘IMPS’ as your fund transfer method.
• To proceed, enter the beneficiary’s MMID and your MPIN.
  Enter the amount to be transferred here.
• Click the ‘Confirm’ button.
• You may be required to validate the transaction by entering the OTP issued to your registered mobile number.
• Enter the OTP and finish the transaction.

Difference: IMPS vs NEFT vs RTGS

Conclusion

While all three techniques, NEFT, RTGS, and IMPS, are equally good and useful, each has its own set of perks and downsides. As a result, depending on the amount to be sent, the time frame in which it must be settled, additional transaction fees, and so on, you must select one of these methods. For example, if you need to transfer an amount less than Rs. 2 lakh quickly, IMPS is the way to go. Similarly, if you need to transfer an amount greater than Rs. 2 lakh immediately, RTGS can assist you.

Thank you for your time reading this! I hope you enjoyed our blog and found knowledge that you will find useful in the future. Behindyourgoals has more articles about finance, crypto, earning money & much more.