Difference Between NEFT, RTGS, and IMPS

Electronic fund transfer methods like NEFT, RTGS, and IMPS help people transfer money between bank accounts quickly and conveniently. These systems offer an easy way to send funds without visiting a bank branch.

 

Although NEFT, RTGS, and IMPS serve a similar purpose, they differ in settlement speed, transaction fees, and transfer limits. Knowing the difference between NEFT, RTGS, and IMPS allows you to choose the most suitable option for your requirements.

IMPS, NEFT, and RTGS are some of the commonly used payment systems in India. Each method has a unique process and purpose. Understanding the difference between NEFT, RTGS, and IMPS requires a basic understanding of how each method works.

IMPS 

The Immediate Payment Service (IMPS) processes real-time fund transfers between bank accounts. The National Payments Corporation of India (NPCI) operates and controls this payment system. IMPS works 24/7, including on weekends and bank holidays.

 

IMPS transfers funds instantly, and banks charge a nominal fee for processing transactions. The fee includes GST and varies from one bank to another. Unlike RTGS, IMPS do not require a minimum transfer amount, which makes it suitable for small payments.

NEFT

The National Electronic Fund Transfer (NEFT) system allows users to transfer funds between bank accounts. The Reserve Bank of India (RBI) manages and controls this system. NEFT operates 24x7, but it processes transfers in hourly batches instead of real-time.

It takes about 30 minutes to 2 hours for the beneficiary to receive funds. NEFT has no minimum transaction amount, making it a convenient option for small transfers. Banks charge fees for NEFT transfers, but the charges are generally lower than IMPS or RTGS.

RTGS

The Real-Time Gross Settlement (RTGS) system processes high-value transfers instantly. The RBI operates and controls this system. Unlike NEFT, RTGS processes each transfer individually rather than in batches.

 

RTGS requires a minimum transaction amount of ₹2 Lakhs, but there is no upper limit on transfers. This system works 24x7 and processes payments in real time. Because of its speed and security, people often use RTGS for large, urgent transfers.

Understanding the difference between NEFT, RTGS, and IMPS requires a comparison of key factors:

When choosing between NEFT, RTGS, or IMPS, consider a few essential factors like fees, transfer limits, and network availability. This helps you choose the most suitable system for your needs. Here are some of the factors you need to consider:

Transaction Fees

Each payment system charges a fee, which varies based on the amount and bank.

• NEFT fees range from ₹2.50 to ₹25

• RTGS fees range from ₹25 to ₹50 per transaction

• IMPS fees range from ₹5 to ₹15 per transaction

 

Banks also charge an 18% Goods and Services Tax (GST) on these transaction fees.

Transfer Limits

• NEFT has no minimum transfer limit, but the bank may impose a daily maximum limit

• RTGS requires a minimum transaction of ₹2 Lakhs, but there is no upper limit

• IMPS has a maximum daily transfer limit of ₹5 Lakhs, but the actual limit varies from bank to bank

Network Availability

Both the sending and receiving banks must be on the RBI’s payment network for NEFT, RTGS, or IMPS transfers to take place.

Digital payment methods like NEFT, RTGS, and IMPS have become essential for quick and seamless fund transfers in India. Understanding these key terms will help you initiate and track transactions with ease.

IFSC Code

The IFSC (Indian Financial System Code) is an 11-character alphanumeric code that identifies a specific bank branch. Banks use this code to route NEFT and RTGS transactions accurately to the recipient’s account.

Beneficiary

The beneficiary is the person or entity receiving the funds from the remitter. To complete a transfer, you must provide the beneficiary’s bank account number and IFSC code.

Remitter

The remitter is the person who initiates the transfer and sends money to the beneficiary. The remitter must provide the recipient's account number and IFSC code to process the payment.

Settlement Time

Settlement time refers to how long it takes for funds to reach the beneficiary’s account. IMPS and RTGS process payments instantly, while NEFT settles payments in hourly batches.

Transaction Reference Number

The transaction reference number is a unique identification number assigned to each transaction. This number allows users to track the status of a payment and resolve any discrepancies if issues arise.

Taking precautions while using fund transfer systems like NEFT, RTGS, and IMPS helps protect your money and personal information. Following these key measures will reduce the risk of errors, fraud, and security breaches.

Verify Recipient Details

Always double-check the beneficiary's account number and IFSC code before sending funds. Incorrect details can cause failed transfers or send money to the wrong account.

Use Secure Networks

Use secure networks like password-protected Wi-Fi or mobile data when making transfers. Avoid public Wi-Fi, as it increases the risk of data theft or hacking attempts.

Enable Two-factor Authentication (2FA)

Enable two-factor authentication (2FA) on your banking app to add an extra layer of security. This method requires an additional verification step, like an OTP, before completing a transaction.

Keep Transaction Records

Save transaction reference numbers and payment details after every transfer. These records help track payments and resolve issues if discrepancies occur later.

Beware of Phishing Scams

Stay alert to fraudulent calls, emails, or messages that request your personal or financial details. Banks never ask for sensitive information, so report suspicious messages immediately.