Internet banking is a blessing. It has brought with it, a world of convenience when it comes to conducting everyday banking transactions, from transferring and receiving funds to paying bills online. These funds can be transferred by using simple and effective payment systems like RTGS (real time gross settlement), NEFT (national electronic fund transfer) and IMPS (Immediate Payment Service).The Reserve Bank of India maintains all these systems, which are applicable for transferring money to any corner of the country. Here are some differences between NEFT and RTGS payment solutions that you should know.
Time taken to transfer funds: As the name suggests, under the RTGS system, funds are transferred on a real time basis i.e. at the time a transfer request is received. RTGS is one of the fastest modes of money transfer available through Indian banking channels, with the beneficiary receiving the fund credit within just 30 minutes. NEFT on the other hand, is also a swift mode of fund transfer but it operates on a deferred settlement basis and fund transfers are settled in batches in hourly slots, not in real time.
The need for a bank account: Both NEFT and RTGS transfer systems can be availed by customers who have a current or a savings bank account. While individuals who do not have a bank account cannot avail RTGS services, they can still deposit cash at bank branches that are NEFT-enabled. Note that such NEFT remittances are restricted to a maximum of ₹50,000 per transaction.
The minimum transaction amount: While there is no minimum amount of funds that can be sent using the NEFT payment solution, the RTGS facility is basically meant for transactions of larger values. As such, retail customers must remit a minimum of ₹2 lakhs on every RTGS transaction. Since RTGS was specially designed for large payments to and for businesses, transactions below ₹2 lakhs are not permitted.
The charges: On an average, you will be charged a small amount of ₹25, excluding the service tax on every transaction done via NEFT. However, for an RTGS transfer, you must pay approximately ₹55 with an additional service charge. Customers who use internet banking services for both NEFT and RTGS are typically charges a lower fee as compared to those individuals who carry out the NEFT transaction through the bank branches.
Option for stop payment: Both RTGS and NEFT payment solutions do not offer the option for stop payment instructions. Since the transactions in RTGS payment solutions happen on a real time basis and the settlement of funds takes place immediately in the books of the RBI, the payments made are considered irrevocable and final. While NEFT transfers are made in hourly slots, there is still no facility for the sender to giving any instructions to stop the payment, if the transaction has already been initiated by the bank.
Time taken to transfer funds: As the name suggests, under the RTGS system, funds are transferred on a real time basis i.e. at the time a transfer request is received. RTGS is one of the fastest modes of money transfer available through Indian banking channels, with the beneficiary receiving the fund credit within just 30 minutes. NEFT on the other hand, is also a swift mode of fund transfer but it operates on a deferred settlement basis and fund transfers are settled in batches in hourly slots, not in real time.
The need for a bank account: Both NEFT and RTGS transfer systems can be availed by customers who have a current or a savings bank account. While individuals who do not have a bank account cannot avail RTGS services, they can still deposit cash at bank branches that are NEFT-enabled. Note that such NEFT remittances are restricted to a maximum of ₹50,000 per transaction.
The minimum transaction amount: While there is no minimum amount of funds that can be sent using the NEFT payment solution, the RTGS facility is basically meant for transactions of larger values. As such, retail customers must remit a minimum of ₹2 lakhs on every RTGS transaction. Since RTGS was specially designed for large payments to and for businesses, transactions below ₹2 lakhs are not permitted.
The charges: On an average, you will be charged a small amount of ₹25, excluding the service tax on every transaction done via NEFT. However, for an RTGS transfer, you must pay approximately ₹55 with an additional service charge. Customers who use internet banking services for both NEFT and RTGS are typically charges a lower fee as compared to those individuals who carry out the NEFT transaction through the bank branches.
Option for stop payment: Both RTGS and NEFT payment solutions do not offer the option for stop payment instructions. Since the transactions in RTGS payment solutions happen on a real time basis and the settlement of funds takes place immediately in the books of the RBI, the payments made are considered irrevocable and final. While NEFT transfers are made in hourly slots, there is still no facility for the sender to giving any instructions to stop the payment, if the transaction has already been initiated by the bank.
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