Differences between RTGS, NEFT and IMPS

Money Transfer Options

Transferring money from one bank account to another is a transaction that is either commercial or domestic. When you transfer money from one bank account to another, you do so by debiting the sender’s account and crediting the receiver’s account. Since fund transfer involves two correspondent banks, the Reserve Bank of India (RBI), the Central Banking Institution of India responsible for the monetary policy and regulating banking services, devises protocols for effecting money transfers between two banks.

With the advent of internet banking and availability of highly sophisticated technology, online money transfer process is gaining ground and increasingly people and commercial establishments use the online money transfer facility. The days of using cheques and demand drafts for effecting money transfers are almost over.

RBI regulates fund transfer policies and processes between banks through its Board for Regulation and Supervision of Payment and Settlement Systems (BPSS). Since fund transfer involves the transfer of funds from one bank to another, a payment and settlement system is necessary and fund transfers come under the Payment and Settlement Systems Act, 2007 (PSS Act).

RBI controls and regulates money transfer through three main options based on the particular requirements of customers using the facility. The three main money transfer options are:

• RTGS – Real Time Gross Settlement
• NEFT – National Electronic Funds Transfer
• IMPS – Immediate Payment Service

IDFC FIRST Bank offers all the three money transfer options i.e. IMPS, RTGS, and NEFT, completely free of charge at branches and net banking along with over zero fees on common services on its savings bank account. In addition to online money transfer, you enjoy unlimited ATM withdrawals across the country, free debit card and DD issuance, free cheque book re-issuance and no charges on setting up e-mandates for automatic payments. Opening a savings account with IDFC FIRST Bank also provides you with one of the highest interest rates in the sector with monthly interest payout to enhance savings.

RTGS

RTGS is a convenient way of transferring funds quickly and efficiently. As the name suggests, the transfer of money takes place in real time and funds get transferred from the sender’s account to the receiver’s account almost immediately. The main features of online RTGS through IDFC FIRST Bank include:

• Real-time settlement on an order-by-order basis – RBI stipulates remittance within 30 minutes of transfer
• Funds settlement takes place in the books of RBI through its InterBank Transfer Scheme, making the transaction final and irrevocable. RBI communicates the transfer to the remitting bank who in turn communicates to the remitter
• RTGS is available 24X7, throughout the year, including Sundays and bank holidays.
• RTGS transactions during non-banking hours above ₹10 lakh will be credited the next working day
• Minimum transfer amount is ₹2,00,000
• Maximum transfer limit is ₹20,00,000
• You can do RTGS transfer through the bank branch or you can do online RTGS through Internet banking
• RTGS transfer is free
• RTGS service available only if the receiving bank branch is RTGS enabled

NEFT

In the NEFT process, RBI pools NEFT transfer requests from participating banks and effects batch wise transfers under the Deferred Net Settlement (DNS) system. The main features of NEFT include -

• Settlement on an order by order basis through the batch system – RBI stipulates remittance within 2 hours of transfer
• Funds settlement takes place in the books of RBI through its InterBank Transfer Scheme, making the transaction final and irrevocable. RBI communicates the transfer to the remitting bank who in turn communicates to the remitter
• NEFT transactions during non-banking hours above ₹10 lakh will be credited the next working day
• Minimum transfer amount is ₹1
• Maximum transfer limit is ₹20,00,000
• You can do NEFT transfer through the bank branch or you can do online NEFT through Internet banking
• NEFT transfer is free
• NEFT service available only if the receiving bank branch is NEFT enabled

NEFT is suitable for funds transfers below ₹2,00,000 as RTGS does not accept transfers of amounts below ₹2,00,000.

IMPS

In the IMPS system, the National Payments Corporation of India (NPCI) facilitates the transfer of funds between member banks. IMPS provides real-time fund transfer service on multiple channels such as mobile, Internet, ATM and SMS. IDFC’s IMPS service provides features which include:

• Settlement on an order by order basis 24/7 instantaneously
• Transfer to receivers’ bank accounts through IFSC
• Instant confirmation to sender and receiver
• IMPS window is always open
• Minimum transfer amount is ₹1
• Maximum transfer limit is ₹2,00,000 per transaction subject to a maximum limit of ₹20,00,000
• You can do IMPS transfer only through Internet banking and mobile banking channel
• IMPS transfer is free
• IMPS service available only if the receiving bank branch is a member of NPCI

IMPS is an excellent fund transfer system when you want to transfer funds urgently.

IDFC FIRST Bank is technologically advanced to transfer online funds from your IDFC FIRST Bank account to any other account anywhere in India provided that the receiver’s bank is a participant in the RTGS, NEFT and IMPS system available to participating banks. For large amounts above ₹2,00,000 and up to ₹20,00,000, you can use the RTGS transfer facility. For amounts less than ₹2,00,000 you can use NEFT facility. For instantaneous transfer of funds up to a maximum of ₹2,00,000 you can use the IMPS facility.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.