Difference Between NEFT, RTGS & IMPS
Banks provide multiple transfer methods such as National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), Immediate Payment Service (IMPS), etc. Based on the value of the transaction, the speed of transfer, service availability, and other factors, each of the transfer will provide different kinds of features and flexibility.
Basic Difference Between NEFT, RTGS and IMPS
The following table illustrates the basic difference between the fund transfer methods –
| NEFT | RTGS | IMPS | |
|---|---|---|---|
| Minimum transfer value | Rs.1 | Rs.2 lakh | Rs.1 |
| Maximum transfer value | No limit | Rs.10 lakh | Rs.2 lakh |
| Type of settlement | Batches | One-on-one settlement | One-on-one settlement |
| Speed of settlement | 2 hours (subject to cut-off timings and batches) | Immediately | Immediately |
| Service availability | Weekdays: 12 batches between 8:00 a.m. – 6:30 p.m. Saturday: 6 batches between 8:00 a.m. 1:00 p.m. Sunday and bank holidays: Unavailable | Weekdays: 8:00 a.m. – 4:00 p.m Saturdays: 9:00 a.m. – 4:30 p.m Sunday and bank holidays: Unavailable | 24/7 |
| Transaction fee | Up to Rs.10,000 – Rs.2.50 From Rs.10,000 up to Rs.1 lakh – Rs.5 From Rs.1 lakh up to Rs.2 lakh – Rs.15 From Rs.2 lakh up to Rs.5 lakh – Rs.25 From Rs.5 lakh up to Rs.10 lakh – Rs.50 | Between Rs.2 lakh up to Rs.5 lakh – Rs.25 From Rs.5 lakh up to Rs.10 lakh – Rs.50 | Up to Rs.10,000 – Rs.2.5 From Rs.10,000 up to Rs.1,00,000 – Rs.5 From Rs.1,00,000 up to Rs.2,00,000 – Rs.15 |
| Online/Offline | Both | Both | Online |
Key Differences Between NEFT, RTGS and IMPS
Online transfer methods are subject to availability based on the customer’s eligibility and level of access granted by the bank. Additionally, the limits on fund value, timings, settlement speed, and other factors are a part of the online fund transfer method to provide a positive experience to the customer when they choose one transfer method over the other. Currently, NEFT, RTGS, and IMPS are the most popular methods of fund transfer in India, few of the notable differences between these methods are listed below:
NEFT – The funds transferred under this method are settled in batches (based on Deferred Net Settlement (DNS) and at a specific time of the day. If the transfer is initiative beyond the cut-off time specified by RBI, the funds are typically settled on the next working day. At present, the fund transfer requests under NEFT are processed in twelve batches between 8 a.m. to 7 p.m. on weekdays and six batches between 8 a.m. to 1 p.m. on Saturdays. Unfortunately, NEFT is not available on Sundays and bank holidays. One of the biggest advantages of NEFT is the cost-effectiveness, an individual can carry out smaller value transfers without worrying about the transaction fee and service charges. A smaller fee on the transfer enables the individual to carry out more payments which make NEFT the most popular and extensively used method for online fund transfers.
Under NEFT, the transactions can be initiated and settled from the bank account of one particular bank to another bank’s account throughout India at no additional cost apart from the standard charges, provided both the banks are a part of the NEFT transfer network (NEFT-enabled). Though some banks might have their own policies concerning the NEFT service provided by them, such as restrictions on transferring funds immediately to a newly added beneficiary, fund value limits restricting the value of transfer beyond a specified limit, etc., these protocols are proven to be effective for safeguarding the customer’s financials.
RTGS – This type of transfer methods is applicable and available for fund transfers between Rs.2 lakh to Rs.10 lakh, however, the biggest advantage for RTGS is the fastest/real-time settlement factor. As soon as the transfer instructions are sent, the fund gets settled almost immediately. However, in order to take advantage of the RTGS facility, both the originator’s and the beneficiary’s account has to be RTGS-enabled. Even though most banks are a part of the vast and popular RTGS transfer network facilitated by RBI, individuals are recommended to either get in touch with their bank directly or refer to their online banking section to discover their eligibility concerning access to RTGS payment system. The transaction fee under RTGS is higher than the other methods due to the faster settlement speed performed on an instruction by instruction basis.
IMPS – Also known for being one of the popular and fastest methods of fund transfer, IMPS is used widely across most banks. Unlike other methods of fund transfer that become unavailable on bank holidays and during off working hours, IMPS functions 24/7 allowing a fund transfer at any time of the day. Similar to NEFT, IMPS also allows transfer of low value-funds but what makes it unique is, it immediately settles the funds. NEFT functions as more or less the combined version of NEFT and RTGS, where remitters are neither worried about the size of the fund and service availability nor do they have to be concerned about the settlement speed.
Things to consider before initiating a fund transfer
- Timings – The timings for each type of fund transfer methods are specific to the bank. Since NEFT and RTGS are largely based on the bank’s hours of operation, depending on the location and specific working hours, the service availability may differ for either of the party involved in the fund transfer.
- GST – GST is applicable on the transaction fee as per the latest norms which are subject to change.
- Transaction fee – A fee is charged for initiating the transfer and not for receiving the funds.
- Transfer network – The remitter needs to check whether the beneficiary’s account is eligible to receive funds or not since the bank might not be a part of the transfer network.
