Difference Between NEFT, RTGS & IMPS
Gone are the days when one had to visit a bank branch to transfer funds to another bank. Even with that, it took a few days for the clearance to happen. As technology improved, faster and more secure ways of transferring funds started becoming a niche. The major instruments of payment include NEFT, RTGS, and IMPS. These are easy and hassle-free payment methods that have their own unique set of features. This guide explores the main distinctions between NEFT, RTGS, and IMPS.
Different Methods to Transfer Funds Online
There are majorly three ways in which one can transfer money online. These include NEFT, RTGS, and IMPS. Assume that one has to send money from their account, which is Canara Bank, R K Puram, Delhi branch, to their friend’s account, which is a branch of Axis Bank located in Ramapuram Chennai; the foremost thing they would require is the IFSC Code. The online bank transfer can be effectuated via Canara Bank’s net banking, mobile banking, or a bank branch.
Furthermore, one might also need the beneficiary's name, the account number, and the IFS code of the receiver’s bank branch. Keep in mind that it might take a while to get the information registered.
What are IMPS, NEFT, and RTGS?
Here is a look at each of the fund transfer methods in brief.
IMPS or Immediate Payment Service IMPS is a technology where one can transfer funds online to another recipient immediately. There is no specific time window assigned for making the IMPS transfers. Services are open 24 x 7 for the same. There is no minimum limit as such. However, there is a maximum limit generally set at INR 2,00,000. Charges depend from bank to bank and range from INR 0 to INR 25, excluding GST charges. Although the transfers are instant, there are a few ways to use IMPS technology. One can use the mobile number and MMID to make transfers or the account number and IFSC Code to initiate payment. Lastly, with the latest edition of the Aadhaar card and account linking facility, one can use their Aadhaar number to initiate payment services.
National Electronics Fund Transfer or NEFT was launched in 2005 and whichever banks accepted this payment system naturally became members of the format. The banks currently accepting this technology can allow their customers to make transfers from one bank to another. There is a specified schedule that customers have to adhere to. This is generally kept from 8 am to 6.30 pm. There is no minimum transfer requirement, but the same is not the case regarding the maximum limit. The maximum amount that can be transferred depends from bank to bank. Some banks keep the limit at INR 10,00,000, and some other banks keep the limit at INR 25,00,000. Every bank charges a certain fee of varying amounts. This can range from INR 2.50 to INR 25 with added GST charges. NEFT funds are transferred on the same day. There is a specific time set for enabling the transfer of funds.
Real Time Gross Settlement or RTGS is an instant method of transferring money from bank to bank. There is also a window kept for the transfer of funds. This is generally done from 8 am to 4 pm. Customers have the provision to make an instant transfer with the RTGS method while adhering to the minimum and maximum limits. The minimum transfer amount using the RTGS system is generally INR 2,00,000, whereas the maximum amount allowed can vary from bank to bank. Generally, the upper limit can be said to be INR 25,00,000. RTGS also incurs charges from the users, which can vary from INR 25 to INR 50 plus GST depending on the bank policy. Funds are instantly transferred.
Differences between NEFT, IMPS, and RTGS
NEFT vs RTGS
|National Electronic Fund Transfer can be used to make online payments without any upper limit defined.||With the Real Time Gross Settlement, one can send instant real-time online transfers within a specified limit.|
|There is no minimum amount required with the NEFT method.||RTGS has capped in the range of INR 2,00,000 minimum payment with no upper limit defined.|
|NEFT has now been made available 24 x 7. However, the transactions are completed in batches, giving it a procedural lag.||RTGS is also available 24 x 7 with the feature of instant transaction delivery.|
|NEFT transactions are taken within 30 minutes||RTGS transactions are completed in real-time.|
|NEFT facility is used for relatively smaller amounts as compared to RTGS.||RTGS facility is used for larger amounts as compared to NEFT and IMPS.|
IMPS vs NEFT
|Immediate Payment Service is an extremely assistive payment tool that one can use to make quick and instant transactions.||National Electronic Fund Transfer can be used to make online payments without any upper limit defined.|
|There is no minimum amount required with the IMPS mode of payment.||There is no minimum amount required with the NEFT method.|
|IMPS services are available throughout the day. There are no specific time restrictions.||NEFT has now been made available 24 x 7. However, the transactions are completed in batches, giving it a procedural lag.|
|IMPS transactions are processed almost immediately and instantly.||NEFT transactions are taken within 30 minutes.|
|IMPS transactions are used for payment limited to INR 2,00,000.||NEFT facility is used for relatively smaller amounts as compared to RTGS.|
RTGS vs IMPS
|With the Real Time Gross Settlement, one can send instant real-time online transfers with a specified range of limits.||Immediate Payment Service is an extremely assistive payment tool that one can use to make quick and instant transactions|
|RTGS has capped INR 2,00,000 minimum payment with no upper limit defined.||There is no minimum amount required with the IMPS mode of payment.|
|RTGS is also available 24 x 7 with the feature of instant transaction delivery.||IMPS services are available throughout the day. There are no specific time restrictions.|
|RTGS transactions are completed in real-time.||IMPS transactions are processed almost immediately and instantly.|
|RTGS facility is used for larger amounts as compared to NEFT and IMPS.||IMPS transactions are used for payment limited to INR 2,00,000.|
Difference Between NEFT, RTGS, and IMPS In Management Terms
It would be interesting for IMPS, RTGS, and NEFT users to know that NPCI and RBI manage these tools. NPCI regulates the Immediate Payment Services. NPCI, National Payment Corporation of India, is an innovative initiative of the Reserve Bank of India. The Indian Banks’ Association with improving the payment infrastructure of India. NPCI has been invested in making IMPS services convenient and hassle-free for its customers across the country.
Speaking of the RTGS and the NEFT services, the Reserve Bank of India monitors the processes for the tools. RBI, the prime central bank of India, provides great features and benefits to its customers using the RTGS and NEFT services. Earlier, the tool was only available during a limited time of the day.
However, currently, the payment tools are available throughout the day. RBI also offers safe and secure gateways for its users and their funds.
Important Things to Consider Before Initiating a Fund Transfer
Online transactions are usually very convenient and hassle-free, but the process is quick and instant. The cash-less transactions help do away with needing to keep cash in the wallet. However, some prerequisites still need to be adhered to while online transactions. Here are a few important points to remember while initiating an online fund transfer.
- It will be prudent to re-check the details of the beneficiary to avoid any payment failure. Often, a sender has to enter the details of the beneficiary, including account number, bank details, MMID, etc.
- A smart move before considering transferring funds would be to be a mobile number and email registered with net banking along with turning on the notifications. This can help in monitoring any transfers made for security reasons.
- One should refrain from using public wifi for security reasons. This is majorly to avoid breaches of banking information as the networks are not safe and secure.
- One can opt to use an Electronic Clearance System (ECS) for recurring transactions, such as monthly payments.
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Frequently Asked Questions (FAQs)
What is the minimum amount for an IMPS transfer?
There is no minimum amount set for an IMPS transfer.
Which mode of payment, NEFT or RTGS, is faster?
RTGS or Real Time Gross Settlement is faster than an NEFT transfer owing to its instant payment feature.
Is the RTGS mode of payment safe?
RTGS mode is considered a safe, secure, and reliable form of payment.
How many times can NEFT transactions be done in a day?
One can use the NEFT service any time of the day. However, it has to be noted that the transactions are closed in batches and thus take time to complete the payment.
For which transactions is RTGS best to use?
Any transactions that need to be paid immediately and within the range of INR 2,00,000 to INR 25,00,000 can be made using the RTGS mode.
What is the NEFT transfer limit?
NEFT mode of payment does not have any upper limit defined.
Are NEFT transactions chargeable?
All NEFT-based transactions are chargeable and per policy. However, the charges vary from bank to bank.
What are RTGS timings?
RTGS facility is available 24 x 7 for its users. Per the governor of the Reserve Bank of India, the RTGS mode of payment is available for its users from 7 am to 6 pm on all working days, excluding the second and fourth Saturdays.
What is the RTGS transfer limit?
Users resorting to the RTGS system of payment will have to adhere to the minimum payment requirement of INR 2,00,000 with no upper limit defined anymore. Some banks used to keep the cap at INR 25,00,000 earlier.
Are RTGS transactions chargeable?
All RTGS transactions are chargeable, and the fees will vary from bank to bank.
Which is the better mode of fund transfer- NEFT or RTGS?
Being faster, RTGS has the upper hand compared with the NEFT payment system.