RTGS vs NEFT vs IMPS

[nikhilchauhan]

In this technological age, digital finance has witnessed a new revolution from cash-based transactions to online methods. However, this digital transaction has gained more popularity after demonetization in India. Thus, new payment options are available like UPI, digital wallets, and cheques and the user must understand the difference between them. Therefore, users must understand the terminology and its impact on transferring funds electronically. However, RTGS Vs NEFT Vs IMPS differs in transaction speed, limits, and charges.

Electronic fund transfer has become normal in this digital age and has changed the traditional method of transaction with money. These three different methods of transactions can be defined as RTGS, which refers to Real-time Gross settlement, NEFT refers to National Electronic Funds transfer, and IMPS refers to Immediate Payment Service (IMPS).

NEFT

NEFT is a national electronic funds transfer is a payment facility that allows transfer of funds from one bank to another account. This NEFT transaction is processed in batches and takes up to 2 hours to complete. With the increasing in demand for online banking, NEFT has become one of the popular methods of transferring funds. Using NEFT, the user need not visit the bank branch to transfer funds through NEFT. However, this system was developed for transferring smaller transactions that are widely used for its convenience and acceptance.

Features of NEFT

• Transfer Limit:

In NEFT, there are no minimum and maximum transaction limits for transferring funds. However, the transaction limit may vary from bank to bank depending on their risk cap. There is no maximum limit for transferring funds through NEFT except for transactions for INDO-Nepal Remittance Schemes.

• Timings

NEFT is available 24x7 and 365 days on all days of the year irrespective of holidays. The actual settlement of transactions takes place in hourly batches during operational banking hours. Therefore, credit to the beneficiary’s account happens within a few hours depending on the bank’s processing schedule.

• Settlement of Transactions

NEFT transactions are processed in batches during working hours and settlement is not immediate, but it takes place during the bank’s processing schedule.

• Charges

NEFT charges for inward transactions are not levied, but charges for outward transactions may vary from bank to bank. Some of the banks may offer free NEFT transactions while others charge for nominal fees depending on the transfer amount.

• Details required

To transfer the amount to the beneficiary’s account, the sender must obtain the beneficiary's name, branch name, bank name, account number, and Branch IFSC.

RTGS

RTGS is a real-time gross settlement which is operated by RBI that allows individuals to make high-value transactions with immediate settlement. RTGS is designed for high-value transactions and provides immediate settlement. This RTGS transfers funds in real-time, unlike NEFT. The amount is credited to the beneficiary's account instantly.

RTGS ensures safety and security which is managed by RBI. In RTGS, transactions are operated individually in real-time. RTGS is available throughout the year, is ideal for high-value transactions, and is transferred immediately. RTGS reduces the risk of fraud and ensures reliability and trust.

Features of RTGS

• Transfer Limit:

To avail of the RTGS facility, the user must transfer the minimum amount of Rs.200,000 and it is a user high-value transaction. However, there is no maximum limit for RTGS transactions.

• Timings

RTGS is available 24x7 and 365 days including weekends and holidays. Thus, there is no time limit for transferring high-value transactions. These transactions can be transferred within 30 minutes. This facility is commonly available during banking hours from 7 AM to 6 PM on weekdays and it may vary from bank to bank.

• Settlement of Transactions

RTGS transactions are processed on-on-one settlement instantly during business hours. Thus, RTGS ensures the transfer of funds immediately upon initiation.

• Charges

RTGS charges no fees for inward transactions online or offline methods. However, the outward transactions range from Rs. 25 plus GST for transfer of the amount between Rs.2 lakh to Rs. 5 lakhs. The amount of Rs. 50 will be charged for transfer of amounts beyond Rs. 5 lakhs. RTGS is reliable and secure for transferring funds.

IMPS

IMPS relates to Immediate Mobile payment service. This system allows for real-time and instant bank transfers through mobile and online platforms. IMPS is designed to offer 24x7 accessibility making it one of the most convenient and flexible payment systems available. IMPS is an instant electronic funds transfer that operates in real-time. The user can transfer a maximum daily limit of Rs.5 lakh. The transaction charges for IMPS vary from Rs. 5 to Rs.15 depending on the bank.

IMPS offers 24x7 inter-bank fund transfer convenience, safe, efficient, and economical. IMPS can be accessed through Internet banking and mobile platforms that eliminate physical visits to banks. These bank transfers can be made on public holidays. These IMPS can be used for different types of purposes. IMPS is better than NEFT and RTGS.

Conclusion

To conclude NEFT and RTGS are better options, but IMPS can be transferred instantly, and charges may vary from bank to bank. However, RTGS is a better option for transferring amounts more than Rs. 2 Lakhs.