What is NEFT, IMPS and RTGS?

Today, account holders need not have to wait for many days to receive money in their bank accounts. Now there are different payment and settlement systems in India which have made the task of transferring money from one account to another an easier and faster way. There are now systems available with the help of which money can be transferred easily or received instantly anytime, anywhere. In India, there are currently many methods of transferring money online such as digital wallets, UPI and more but the most commonly used digital payment systems are NEFT, IMPS and RTGS. By now, almost all of the banks, private companies and all the government bodies have adopted these different payment methods. Okay now let us go deep into what these payment systems actually are and what is the primary difference between them.

NEFT means National Electronic Funds Transfer, IMPS is Immediate Mobile Payment Service and RTGS is Real-Time Gross Settlement. IMPS was introduced by NPCI – National Payments Corporation of India and NEFT and RTGS were introduced by RBI – Reserve Bank of India.

National Electronic Funds Transfer (NEFT) is a payment system facilitating one-to-one funds transfer. With the help of this system people can electronically transfer money from any bank branch to an account with the same or any other bank branch too. Transferring of funds through this system does not occur on a real-time basis and the fund transfer settles in 23 half-hourly batches.

Immediate Mobile Payment Services (IMPS) is a real-time instant inter-bank funds transfer system which is managed by NPCI – National payment corporation of India. This system is available during 24/7 throughout the year and includes bank holidays too, not like NEFT and RTGS.

Real-Time Gross Settlement (RTGS) is another payment system where the money is credited in the beneficiary’s account in real-time and on a gross basis. This system is primarily meant for large value transactions requiring and receiving immediate clearing.

All these payment systems were introduced to offer convenience and flexibility to the account holders. The remitter must have the basic bank account details of the beneficiary for the use of these transfer services. The details must include the beneficiary’s name and bank’s IFSC code. All of these payment methods are used for transferring money yet they have few differences in them. Also, some amount of separate fee is levied for transferring the money, but there is no fee applied for receiving the money.

Using NEFT, one can transfer funds from one account to another and the accounts involved could be individual or corporate accounts at any bank branch participating in the NEFT payment method. The cash deposits of up to Rs. 50000 can be credited to the beneficiary account at any NEFT enabled branches. One can even transfer funds upto 10 lakh rupees using this method. For its use, you would need net banking along with internet connectivity and the beneficiary needs to be registered, to register the beneficiary it needs the help of account number and IFSC code. The transactions with this system happen in half-hourly batches. The minimum transfer limit through NEFT is Re. 1 and there is no maximum transfer limit but maximum amount per transaction is limited to Rs. 50000. The service timings for this system are available 365 days 24/7. There are no charges applicable for inward transactions. It has both online as well as offline payment options available.

With RTGS or Real-Time gross settlement, one can be able to transfer funds from one account to another account which belongs to same or different banks as well. This system is specifically used for high-value transactions which are above 2 lakh rupees. For its use, you would need net banking along with internet connectivity and the beneficiary needs to be registered, to register the beneficiary it needs the help of account number and IFSC code. The transactions with this system happen in real-time. The minimum transfer limit through RTGS is Rs. 2 lakhs and there is no maximum transfer limit in it. The service timings for this system are available 365 days 24/7. There are no charges applicable for inward and online transactions and charges for outward transactions applicable for amount Rs. 2 lakhs to Rs. 5 lakhs are Rs. 25 and for amounts above Rs. 5 lakhs are around Rs. 50 and not more than that, plus GST is also applicable. It has both online as well as offline payment options available.

Lastly, using IMPS, Immediate Mobile Payment Services IMPS one can transfer funds from one bank account to another whether the account may belong to the same or different banks. Here the transfer is done instantly. For its use, you would need net banking along with internet connectivity and the beneficiary needs to be registered, to register the beneficiary it needs the help of account number and IFSC code. The transactions with this system happen in real-time. The minimum transfer limit through IMPS is Re. 1 and maximum transfer limit is Rs. 2 lakhs. The service timings for this system are available 365 days 24/7. There are charges applicable for remittance through IMPS which are decided by individual banks and PPIs, plus it includes taxes. It has both online as well as offline payment options available.

NEFT payment systems take longer when compared to IMPS. You can do as many NEFT transactions in a day and there is no limit to that. RTGS is a really highly safe and secure method of payment as it is monitored by the government. The faster payment system depends on the urgency and the amount of your transaction. If the transaction is above Rs.2 lakh, then RTGS is a faster plus more effective mode of payment. But for other payments having lower amounts, the NEFT system is a more efficient mode of payment.

By now, we have covered all the detailed explanations and differences about NEFT, IMPS and RTGS. We hope this article has been helpful for you in understanding all these terms.

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