RTGS or Real Time Gross Settlement system is a method of transferring money from one bank account to another, using the Reserve Bank of India as the intermediary. As the name of the process suggests, the money transfer occurs in real time or immediately. Gross Settlement, on the other hand, refers to the fact that the entire amount is settled at once in a one-on-one basis.
Here is all you need to know about the RTGS transfer method and how it can be an effective way of transaction.
1. RTGS transfers are final
RTGS transfers are permanent, which means that you cannot cancel the fund transfer once it has been initiated. So, only engage in the RTGS payment method if you are absolutely sure about the amount that needs to be transferred.
2. No risk of settlement involved
Since the procedure is conducted in a real-time, one-on-one basis, you do not need to worry about settlement risks. Usually, a settlement procedure is in effect in case of other modes of fund transfers, which means that the amount transferred is not the amount received by the beneficiary. However, in RTGS, you can be sure that the exact amount will reach the beneficiary.
3. Minimum limit of fund transfer
If you want to transfer money using the RTGS mode of payment, you need to ensure that the amount is greater than or equal to Rs. 2 Lakhs. Any amount lower than this cannot be transferred using the RTGS payment. However, there is no upper limit to how much you can transfer using this method.
4. Fund is transferred individually
If you initiate a RTGS transfer, your payment will be processed and cleared individually. In the NEFT mode of payment, the transactions are cleared in batches, but in RTGS, each payment is considered separately. This means that you do not have to wait for the funds to reach the account of the beneficiary. As soon as you apply for the RTGS, you can ask the beneficiary to check their accounts for the payment.
5. IFSC code is mandatory
If you want to initiate the RTGS transfer, you have to provide the IFSC code of the beneficiary’s bank branch. There is no way around this and the transaction cannot be initiated without the proper IFSC code in question.
You can initiate RTGS transfer by accessing your bank’s internet banking portal and selecting fund transfer. Under this option you will find the RTGS method. Just enter the amount to be transferred and the beneficiary’s IFSC code to initiate the procedure.
Here is all you need to know about the RTGS transfer method and how it can be an effective way of transaction.
1. RTGS transfers are final
RTGS transfers are permanent, which means that you cannot cancel the fund transfer once it has been initiated. So, only engage in the RTGS payment method if you are absolutely sure about the amount that needs to be transferred.
2. No risk of settlement involved
Since the procedure is conducted in a real-time, one-on-one basis, you do not need to worry about settlement risks. Usually, a settlement procedure is in effect in case of other modes of fund transfers, which means that the amount transferred is not the amount received by the beneficiary. However, in RTGS, you can be sure that the exact amount will reach the beneficiary.
3. Minimum limit of fund transfer
If you want to transfer money using the RTGS mode of payment, you need to ensure that the amount is greater than or equal to Rs. 2 Lakhs. Any amount lower than this cannot be transferred using the RTGS payment. However, there is no upper limit to how much you can transfer using this method.
4. Fund is transferred individually
If you initiate a RTGS transfer, your payment will be processed and cleared individually. In the NEFT mode of payment, the transactions are cleared in batches, but in RTGS, each payment is considered separately. This means that you do not have to wait for the funds to reach the account of the beneficiary. As soon as you apply for the RTGS, you can ask the beneficiary to check their accounts for the payment.
5. IFSC code is mandatory
If you want to initiate the RTGS transfer, you have to provide the IFSC code of the beneficiary’s bank branch. There is no way around this and the transaction cannot be initiated without the proper IFSC code in question.
You can initiate RTGS transfer by accessing your bank’s internet banking portal and selecting fund transfer. Under this option you will find the RTGS method. Just enter the amount to be transferred and the beneficiary’s IFSC code to initiate the procedure.
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