Money Transfers: NEFT, RTGS and IMPS Explained

Modern banking technologies like NEFT, RTGS and IMPS have made things simpler. You can now send money from one bank account to another in minutes.

We live in a world that is constantly trying to simplify itself. As human beings, the supreme overlords of Planet Earth, wasting time on menial things like standing in a queue, asking for directions or walking up to a bank to transfer money is so last century. We are a generation that swears by Credit Cards and digital transactions.

We are a part of the digital revolution wherein everything that can possibly be purchased, transferred, interacted with or commented upon can be done from the comfort of our own homes – through the magic of the Internet.

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Previously, sending money from your bank account to another involved a fair bit of legwork. Going to your bank, filling up a challan, standing in a queue and sometimes, enduring the wrath of an overworked teller.

Modern banking technologies like National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS) and Immediate Payment Service (IMPS) have made things simpler. So simple that you could send money from your savings bank account to another in mere minutes while sipping on that heavenly pina colada, and checking up on the latest GoT fan predictions.

IMPS was rolled out almost seven years ago in November 2010. It is the successor to fund-transfer services like National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS). While NEFT was launched in November 2005, RTGS was adopted in 1985 by three central banks and had gained itself a place of prominence by 2005.

In the following article we’ll look at the features of these three transfer services:

NEFT: National Electronic Funds Transfer

This commonly used money transfer option is offered by almost all banks across India. NEFT only requires an active internet connection, your bank-certified online banking credentials and details of the recipient’s account, including the IFSC code of the recipient’s bank. If your bank and your recipient’s banks are participants in the NEFT system, then this is the simplest mode to perform funds transfer.

Individuals, firms or corporates having accounts with a bank branch can transfer funds using NEFT. Individuals without a bank account can also transfer money using NEFT.  They can deposit cash at any NEFT-enabled branch with instructions to transfer funds using NEFT. Simple!

Such customers are also given a separate transaction code in the NEFT system to transfer their funds to the beneficiaries. In order to do that, they have to furnish full details including their complete address, telephone number, etc.

Thus NEFT helps you initiate funds transfer transactions without the need for having a bank account. Individuals, firms or corporates holding accounts with an NEFT-enabled bank branch can receive funds through the NEFT system.

It also helps in transfer of money from India to Nepal under the Indo-Nepal Remittance Facility Scheme.

TRANSACTION AMOUNT

The important feature of NEFT is that there is no limitation on the amount that can be transferred, with the exception of walk-in customers who do not hold accounts and those remitting funds under the Indo-Nepal Remittance Facility Scheme. However, banks can set their own limit on NEFT transactions. Most banks set a limit on per-transaction basis. For example, it’s Rs. 10 lakhs in the case of ICICI Bank.

TIMINGS

Currently, NEFT operates in hourly batches. There are about twelve settlements starting from 8 am to 6:30 pm on week days (Monday to Friday) and six settlements from 8 am to 1 pm on Saturdays.

Click here to read a detailed article on NEFT

RTGS: Real Time Gross Settlement

RTGS helps you transfer money from one bank to another without the involvement of any waiting period. In practice, RTGS is ideal for high-value transactions that require immediate clearance.

This system is usually maintained by the country’s apex central bank, Reserve Bank of India (RBI), and all applicable transactions are cleared in real time. According to RBI, the term ‘Real Time’ refers to the processing of instructions at the time they are received rather than at some later time. And ‘Gross Settlement’ means that the settlement of funds transfer instructions occurs individually (on an instruction-by-instruction basis).

Since this system is maintained by the RBI and the settlement of funds takes places in its books, RTGS payments are final and irrevocable.

TRANSACTION AMOUNT

The minimum amount that can be transferred with RTGS is Rs. 2 lakhs and there isn’t a stipulated maximum limit. There is no upper limit specified by RBI; though banks can set their own upper limits.

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TIMINGS

Under normal circumstances, the beneficiary bank branch receives the RTGS funds in real time as soon as the funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary’s account within 30 minutes of receiving the funds transfer message. So, it takes less than 30 minutes to move money from one bank account to another. Isn’t that cool?

The RTGS service window for customer transactions is available from 09:00 hrs to 16:00 hrs on week days and from 09:00 hrs to 14:00 hrs on Saturdays for settlement at the RBI’s end.

However, do note that the timings followed by your bank may vary depending upon the customer timings at the relevant branch.

Click here to read a detailed article on RTGS

IMPS: Immediate Payment Service

Yet another online money transfer option, IMPS is operated by the National Payments Corporation of India (NPCI) and involves almost all the major/minor banks of the country as participating members. Unlike NEFT or RTGS, IMPS transactions can be undertaken 24×7 and conveniently through your mobile phone, ATM or the internet.

Naturally, this system is fast, safe and available to an exponentially larger segment o the population. A good internet connection, proper credentials from the bank and a recipient’s account are all you require for an IMPS transaction.

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Not only is the process instant, but also user-friendly. You need to add the beneficiary details just like you do for NEFT/RTGS and wait for it to get active. Some banks allow you to transfer funds to a new beneficiary in as little as 30 mins. Keep the name, account number, IFSC or MMID (Mobile Money Identifier) Code, bank account type, details of the beneficiary, etc. handy for quick addition.

TRANSACTION AMOUNT

Minimum transaction limit for IMPS is Rs. 1 and there is no maximum limit. However, banks set a per-transaction limit for IMPS. For HDFC Bank, per IMPS transaction limit is capped at Rs. 2 lakh.

Click here to read a detailed article on IMPS

Here’s a table of comparison between NEFT, RTGS and IMPS

 Managing personal finance needn’t be a painful task when services like NEFT, RTGS and IMPS are there to simplify funds transfer for you.

And we are here to make finding and applying for the right Credit Card or loan easy for you. We understand that applying for a loan or Credit Card can get intimidating. Hence we’ll use our years of experience and expertise in the field to guide you along your journey of getting the best loan or Credit Card. We will not influence your decisions, but will answer questions when you ask.