3 Min Read | March 26, 2021
In India, we have
various payment and settlement systems that have made the job of transferring
funds from one bank account to another faster and easier. NEFT, RTGS, IMPS,
UPI, GooglePay, PhonePay, and other digital wallets are some most popular
payment options available in India, used by a number of people and
Not only these options have made the payment and settlement tasks easier and faster, but it has also bridged the gap between the entities and their customers and other related people. These methods are useful, fast, and convenient for documentation purposes.
However, in this blog, our prime focus would be to cover the differences between NEFT, RTGS, and IMPS. So, let’s start.
As we have currently discussed, you can transfer money through various online methods in India. But the most common and popular methods used by a large number of government bodies, organizations, and other related people are:
RTGS and NEFT payment options were introduced by the Reserve Bank of India (RBI). On the other hand, IMPS was introduced by the NPCI (National Payments Corporation of India).
To learn more about these payment modes, read further.
NEFT lets you transfer money electronically from your bank account to another person’s account in the same or a different bank account. Generally, transfers take place in batches every half hour and aren’t done in real-time. One rupee is the minimum transaction value while the maximum transfer limit differs with each bank.
For example, the maximum transfer is Rs. 10 lakh per day at ICICI Bank and at IDFC Bank, it is Rs. 20 lakh per day.
If you transfer money using the NEFT process through net banking or a bank’s mobile app, you won’t attract any charges. However, if you approach your bank for making an NEFT transfer, there would be some charges applied.
For instance, ICICI bank will charge you between Rs. 2.25 to Rs. 24.75 plus the GST, depending on the transaction amount.
The RTGS process lets you credit the fund to the beneficiary’s account in real-time, i.e., instantly. The RTGS payment and settlement system is specifically designed for transactions of large value that need instant settlement or clearing. Institutions for fund transfers and corporates use this method widely on a real-time basis.
RTGS allows you to transfer the minimum amount of Rs. 2 lakhs while the maximum transfer limit differs with each bank. However, there’s no upper ceiling set by the Reserve Bank of India. For example, the maximum transfer limit is Rs. 10 lakh per day for ICICI Bank and Rs. 20 lakhs for IDFC Bank.
Just like the NEFT process, if you use RTGS to initiate a transaction through online modes, you won’t be charged with extra amount. However, if you do it through the bank branches, there would be some charges applied.
For example, you would have to Rs. 20 to Rs. 45 plus GST for the ICICI bank.
Unlike NEFT and RTGS, IMPS is a real-time quick inter-bank funds transfer system managed by the National Payment Corporation of India and is available 24/7 throughout the year including bank holidays. Moreover, this offers the facility of a real-time fund transfer on online channels of banks such as net banking, mobile banking, through ATMs, and via SMS.
The transfer of funds through IMPS from your account to the beneficiary account is quick. All you need is the account number and IFSC code of the beneficiary to complete the transaction.
The minimum transaction value for the IMPS fund transfers is Re 1 while the maximum amount is limited to Rs. 2 lakhs. Retail customers use this payment method widely for small-value transactions.
The transaction charges may vary depending on the bank. For example, there aren’t any charges for transferring funds using IMPS mode levied by IDFC First Bank. However, HDFC Bank may charge between Rs. 3.5 to Rs. 15 with GST, depending on the transaction amount.
Until now, we assume that you must have got an idea of how these three payment and settlement options differ from each other. However, here’s a quick overview of the same in the form of a table:
In case you have any more queries regarding the same, please drop a comment below. So, this was it.
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