Currently, there are numerous payment systems available. Nevertheless, NEFT and RTGS remain highly beneficial in certain situations. People are curious to understand the distinctions between these two payment systems.
In this post, I will delve into the dissimilarities between NEFT and RTGS. You will gain insight into the distinct applications of these two payment methods.
Difference Between NEFT and RTGS
| NEFT | RTGS | |
| Full Form | National Electronic Fund transfer | Real Time Gross Settlement |
| Minimum Payment | ₹1 | ₹2 lakh |
| Maximum Payment | No Limit | No Limit |
| Maximum Cash Payment | ₹50,000 | Nil |
| Fund Transfer Mode | Payment is done in batches. The minimum difference between two batches is 60 minutes | The Payment is done continuously. The transfer is processed instantly |
| Clubbing of Mandate | Many fund transfer mandates are clubbed together and settled simultaneously in batches | Each mandate is settled individually |
| Walk In Customer | The Customer who has not a bank account with a branch can also use NEFT to send Money | Walk-in Customer can’t use RTGS |
| Working Hours | 8 AM to 7 PM (Week Days) 8 AM to 7 PM (First and Third Saturday) | 9 AM to 4:30 PM (Week Days) 9 AM to 4:30 PM (First and Third Saturday) |
| Maximum Charges /transaction (To Other Bank Account) | Up to 10,000: ₹2.5 10,000 – 1 lakh: ₹5 1 lakh – 2 lakh: ₹15 Above 2 lakh: ₹25 (No Charge From Jan 2020- RBI) | 2 lakh – 5 Lakh : ₹30 Above 5 Lakhs: ₹55 |
| Money Credit Expectation | Within 2 hours of the Batch settlement | Within 30 minutes of Initiating Transfer |
| Refund of Failed Transaction | Within 2 hours of batch settlement | Within 1 hours of payment to the beneficiary bank |
Recommended: IMPS, NEFT and RTGS Charges of SBI
Facts About NEFT
NEFT facilitates one-to-one transfers from a bank account or individual to another bank account. This fund transfer system operates across India and is accessible through most banks. Nowadays, the majority of bank branches are NEFT-enabled, making money transfers easy.
You can utilize the NEFT fund transfer system via Net Banking, mobile banking, or by visiting a branch. At the branch, you can also deposit cash for the transfer, but the cash amount cannot exceed ₹50,000.
It’s important to note that NEFT does not provide immediate money transfers. Instead, it operates in batches that are settled at regular intervals during working days and hours. Batch settlements occur approximately every 30 minutes.
To transfer money through NEFT, you need the beneficiary’s bank account number and IFSC code. These two pieces of information are sufficient for the transfer, and each bank branch has its unique IFSC code.
NEFT can be used to transfer money to NRE (Non-Resident External) or NRO (Non-Resident Ordinary) accounts. However, it is not permitted to send money outside of the country, except to Nepal and Bhutan.
Unlike UPI Payment system, and IMPS you can’t ask or request money using this system.
You can learn more about the mechanism and other important facts about NEFT Charges and timings in my detailed post.
Facts About RTGS
This system was primarily designed for businesses as it offers the fastest and most cost-effective means of transferring high-value funds. However, due to the minimum limit of ₹2 lakh, it is seldom utilized by the general public.
In the RTGS system, fund transfer orders are not subject to batch processing or pooling. Instead, transactions are immediately initiated for fund transfers. These transactions are recorded in the RBI (Reserve Bank of India) database, ensuring that reversals are not possible.
To make a fund transfer through RTGS, the following information is required:
- Amount to be remitted
- Remitting customer’s account number from which the funds will be debited
- Name of the beneficiary bank and its branch
- IFSC (Indian Financial System Code) number of the receiving branch
- Name of the beneficiary customer
- Account number of the beneficiary customer
- Any additional sender-to-receiver information, if required.
After the successful RTGS transaction, the remitting customer and beneficiary both would receive a message in this regard.
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In this post, I have told you about the differences between NEFT and RTGS. Now you can also learn about the actual charges of NEFT and RTGS as several banks charge less than the maximum limit given by the RBI. The charge is far less if you use the Net Banking. The banks have also slightly different timings for the RTGS mandates. You should also learn that UPI apps do not charge for the fund transfer, however, there is a limit of the transaction through them.
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