In modern times, transferring money between different bank accounts has become almost effortless. Whether you’re paying rent, transferring funds to family, or shopping online, digital banking has made everything simple and fast. But when you open your banking app, you might see options like NEFT, RTGS, and IMPS, and wonder which one to use.
Let us look into the definitions and differences of these terms in the easiest way possible.
What Is NEFT (National Electronic Funds Transfer)?
NEFT is the most preferred method of money transfer in India between accounts in different banks. It works on a system that settles transactions in batches. This means transfers may take some time before reaching the receiver.
Key Features of NEFT
- Operates round the clock, including bank holidays.
- There is no restriction on the amount of money you can transfer.
- Due to the batch settlement of transactions, the transfer could take from 30 minutes to 2 hours.
- It is suitable for small to medium-value transactions.
Example
If using NEFT, you send ₹5,000 to your friend; it can take an hour for the money to appear in their account.
What Is RTGS (Real Time Gross Settlement)?
RTGS is meant for high-value instant transfers. It processes payments in real time, as the name suggests, which means that the transfer is instantaneous and happens individually rather than in batches.
Key Features of RTGS
- The minimum transfer amount is ₹2 lakhs, and there is no upper limit.
- It functions 24×7, including weekends and holidays.
- It is appropriate for making large corporate payments or buying properties.
- Transfers are done instantaneously, and there is no wait time involved.
Example
If you are purchasing a car and you have to pay ₹5 lakhs to the seller, RTGS would be the best choice in terms of speedy and secure communication.
What is IMPS (Immediate Payment Service)?
IMPS is the quickest and most user-friendly method of transferring money at once, be it anywhere, anytime. With IMPS, you do not have to wait for the next banking day or hours, as it is available in real-time and around the clock, even on Sundays and holidays.
Key Features of IMPS
- Transfer of money is instant, within a few seconds.
- Makes transactions hold on bank holidays.
- Great for both the small and urgent transfers.
- Normally, the transfer cap is ₹5 lakhs per day (can be different for each bank).
Example
IMPS suits well if sending ₹2,000 to a friend for dinner needs to be done quickly, since money is transferred instantly.
Difference Between NEFT, RTGS, and IMPS
| Feature | NEFT | RTGS | IMPS |
| Speed | 30 mins – 2 hrs | Instant | Instant |
| Availability | 24×7 | 24×7 | 24×7 |
| Minimum Limit | No limit | ₹2 lakhs | No limit |
| Maximum Limit | No limit | No limit | ₹5 lakhs (varies by bank) |
| Transfer Type | Batch-wise | Real-time | Real-time |
| Best For | Regular transfers | High-value payments | Quick small payments |
| Charges | Usually low | Slightly higher | Varies by bank |
From this, we can get a clear picture that NEFT is best for regular transactions, RTGS for large, important payments, and IMPS for quick, everyday transfers.
When Should You Use Each Payment Method?
Your decision relies on the speed of money transfer you desire and the amount you intend to send.
- Select NEFT if your remittance is not urgent. It is secure and has a large acceptance.
- For High-value transactions like buying property or making business payments, use RTGS.
- If you need to transfer money at once, irrespective of the time, then IMPS is your best bet.
These methods are the way to go if you want full power over your finances, along with the rapid digital banking growth.
Are There Any Charges for These Transfers?
The majority of Indian banks offer NEFT and RTGS free of charge for online banking clients. IMPS may charge a small fee depending on your bank, and it typically ranges from ₹2 to ₹10 per transaction.
Fast as well as cost-effective, these payments are available if you are using mobile banking or internet banking.
The Rise of UPI and Modern Payment Systems
UPI (Unified Payments Interface) became the favourite choice for millions as the payment method, while NEFT, RTGS, and IMPS still enjoyed popularity. It provides instant and free transfers through just a mobile number or UPI ID.
Nonetheless, larger or more secure transactions, especially among bank accounts, still have NEFT, RTGS, and IMPS as the essential tools in India’s banking system.
Conclusion
A clear distinction between NEFT, RTGS, and IMPS will lead you to the best option for every payment type.
- NEFT is the best choice for normal transfers that do not need to be instant.
- RTGS is the best choice for large, important payments that can’t take longer than immediate processing.
- IMPS is the most convenient choice for quick and easy fund transfers.
Knowing the operation of each system will help you to manage your money wisely, save time, and ensure your payments reach safely, irrespective of the amount or urgency.
