With the rise of online payment methods and increased technical usage, transferring funds between bank accounts has become more accessible. Users can choose from various modes of payment based on factors such as the amount to be transferred and the desired time for crediting the recipient's account.
Understanding NEFT- National Electronics Funds Transfer
NEFT, regulated by the Reserve Bank of India, is an electronic method for online money transfers. It is available on internet banking and mobile banking platforms of most Indian banks. NEFT transactions do not incur additional costs and are processed in separate batches, with specified cut-off timings.
- NEFT is a one-to-one payment facility.
- Transactions can only occur between banks offering NEFT services.
- NEFT transactions are not real-time, taking a few days to complete.
- As of 2020, NEFT transactions can be performed 24*7.
- Beneficiaries must be added on the Internet banking portal.
- No limits on the amount of NEFT transactions.
- Transaction fees range from Rs. 2.5 to Rs. 25.
- Payments via NEFT are processed and settled in half-hourly batches, following RBI guidelines.
Understanding RTGS- Real-Time Gross Settlement
RTGS, which stands for Real-time Gross Settlement, enables instant money transfers between bank accounts without any delay. This method is ideal for high-value transactions, and unlike NEFT, it does not follow a specific processing method, settling funds in real-time.
- RTGS transactions are processed on a one-to-one basis.
- Accessible at any time, on any day of the year.
- Primarily used for high-value transactions.
- Can be used online and offline.
- Required details for RTGS transactions include the amount, account number, beneficiary's name, bank's branch, beneficiary's IFSC, and beneficiary's bank branch.
Difference between NEFT vs RTGS
The key differences between NEFT and RTGS include:
Point of difference |
NEFT |
RTGS |
Minimum amount to be transferred |
Re. 1 |
Rs. 2 Lakh |
Maximum amount to be transferred |
No limit |
No limit |
Type of settlement |
Amount settled in batches |
Amount settled one-on-one |
Settlement time |
2 hours |
Immediate |
Transfer timings |
24*7, all 365 days |
Varies from bank to bank |
Mode of transfer |
Both- online and offline |
Both- online and offline |
Additional charges |
No charges applicable |
Rs. 30 on outward transactions between Rs. 2 lakh and Rs. 5 lakhs; Rs. 55 on outward transactions of more than Rs. 5 lakhs |
Additional charges on NEFT Transactions
Until December 2019, NEFT transactions incurred the following additional charges as a money transfer fee:
Transaction amount |
Fee amount |
Less than or equal to Rs. 10,000 |
Rs. 2.5 |
Between Rs. 10,000 and Rs. 1 Lakh |
Rs. 5 |
Between Rs. 1 Lakh and Rs. 2 Lakh |
Rs. 15 |
Equal to or more than Rs. 2 Lakh |
Rs. 25 |
From January 2021, RBI removed all charges on online NEFT transactions to promote digital transactions.
Additional charges on RTGS Transactions
Charges for RTGS transactions are as follows:
Type of transaction |
Charges applicable |
Inward transactions |
No charges |
Online transactions (Internet/Mobile Banking) |
No charges |
Outward transactions (amount = Rs. 2 lakh – Rs. 5 lakh) |
Rs. 30 |
Outward transactions (amount < Rs. 5 lakh) |
Rs. 55 |
NEFT vs RTGS: Which is Better?
Considering the differences, NEFT and RTGS serve distinct purposes. NEFT is suitable for lesser amounts with no urgency, while RTGS is preferred for immediate transfers of large amounts. Both methods are secure, supporting the digital, cashless initiative and are regulated by the Reserve Bank of India.
