Different Types of Money Transfer in India
Do you wish to move money from one of your bank accounts to another of your accounts? You must have a sound understanding of the different types of money transfer services in India. You should learn about the different types of money transfers in India. The good news is that our country offers a variety of methods for transferring money. People are now able to conduct transactions online in a simpler manner as a direct result of the significant technological advancements that are taking place every day. A growing number of people are becoming familiar with technologies such as online transactions, which are increasingly common in their everyday lives of people. The development of new technologies has made all forms of monetary transactions in India more straightforward and user-friendly.
About NCPI
National Payments Corporation of India (NPCI) is the Indian body that oversees all retail payment systems. It was established with the assistance of the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA). Once the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) was established in 2005, the Reserve Bank of India (RBI) issued a vision statement proposing the establishment of an umbrella entity for the country’s Retail Payment Systems. This organisation’s primary purpose was to combine and integrate numerous systems with varying service levels into a unified and standardised business procedure for all retail payment systems across the nation. This organisation’s other purpose was to facilitate a cheap payment mechanism for the benefit of ordinary people across the nation and to promote financial inclusion.
Types of Money Transfer Services in India
People often like using different types of money transfer services in India when they need to move money around. It enables consumers to make online fund transfers using their mobile devices and laptop computers from the convenience of their own homes and places of business, the use of electronic payment methods is experiencing a meteoric rise in popularity. Additionally, it eliminates geographical restrictions and enables them to transfer money in a hassle-free manner by just utilising the IFSC Codes.
However, selecting the most appropriate means by which to move the money can be a difficult task. You can make the best decision by taking into account several aspects, such as the transfer limit, the time required, the cost, etc.
Here is a list of the several Forms of Money Transfers in India that you should be familiar with:
NEFT
National Electronic Fund Transfer system (NEFT) that offers an efficient, safe, cost-effective, and dependable method of transferring funds from bank to bank and from a sender’s account in one bank to a recipient’s account in another bank throughout the country.
It is an electronic payment system where payment instructions between banks are processed and resolved on a deferred net settlement (DNS) basis at predetermined periods throughout the day. There is no minimum or maximum transaction value required to use this service.
What is NEFT transfer in banking?
Using RBI’s NEFT transfer service, funds are transferred under NEFT to the credit account of the other participant. RBI acts as the service provider and transfers the credit amount to the account of the other bank. NEFT utilises a Deferred Net Settlement (DNS) model that settles transactions in batches. In DNS, the settlement or transactions happens only at a given point in time.
How to do NEFT?
Step 1: First, the sender must give the required information, such as:
• Beneficiary’s Name
• Beneficiary’s Account Number
• Type of Beneficiary Account
• IFSC code of the beneficiary bank, to initiate the NEFT process.
• The name, location, and base branch of the bank holding the beneficiary’s account.
Step 2: The bank branch that received the fund transfer request composes a message and transmits it to its pooling centre (also called the NEFT Service Centre).
Step 3: The pooling centre transmits the message to the NEFT Clearing Centre (managed by the National Clearing Cell, RBI, Mumbai) so that it can be included in the next available batch.
Step 4: The RBI sorts the transaction by the bank and makes account entries to receive funds from (debit) the originating banks and give funds to (credit) the receiving banks. Therefore, bank-specific remittance messages are transmitted to the recipient banks via their pooling centre (NEFT Service Centre).
Step 5: Upon receiving the remittance messages from the Clearing Centre, the destination banks credit the beneficiary accounts.
NEFT transfer limit
There is no amount limit for transferring funds via NEFT.
NEFT time taken
The transactions are processed in batches per hour. There are twelve settlements from 8 a.m. to 7 p.m, Monday to Friday, excluding the second and fourth Saturdays.
RTGS
Real-Time Gross Settlement or RTGS is a process that is nearly identical to NEFT, except for the minimum transfer amount and the time it takes for NEFT to credit the recipient’s account. RTGS is utilised for transactions greater than two lakh rupees. However, this procedure has no upper limit, making it easier for individuals to conduct transactions of enormous size.
What is RTGS transfer in banking?
The primary difference between NEFT and RTGS is that the money is transmitted in real-time, as implied by the name. Within thirty minutes after completing the process, the money is deposited into the recipient’s bank account, which is of tremendous assistance in times of emergency.
How to do RTGS?
Step 1: Log in to Net Banking/Mobile Banking with your Customer ID and password.
Step 2: Select the tab Funds Transfer (Other Bank Account).
Step 3: Select Debit/Credit Account, IMPS as the transfer method, and the recipient’s account.
Step 4: Enter the transfer amount and click the Submit button.
Step 5: Click the confirm button.
Step 6: Recheck all details and authorise the transaction using the OTP (one-time-password) sent to your registered mobile phone number.
Step 7: Finally, confirm by clicking the submit box.
RTGS transfer limit
The minimum amount required is Rs 2,00,000, whereas there is no maximum limit.
RTGS time taken
The time limit on working days is 8:00 a.m. to 6:00 p.m.
IMPS
Immediate Payment Service (IMPS) is a service for instant financial transfers that can be utilised at any time.
What is the difference between NEFT and IMPS?
The NEFT payment system is operated by the Reserve Bank of India (RBI) whereas the IMPS money transfer service is managed by the National Payments Corporation of India (NPCI).
What is IMPS transfer in banking?
IMPS is equivalent to NEFT and RTGS. To prevent complaints of fraud, the transaction limit is kept relatively low. For IMPS transfer, all you need is the IMPS id (MMID) and the mobile number of the recipient account holder.
How to do IMPS?
Step 1: Log in to Net Banking/Mobile Banking with your Customer ID and password.
Step 2: Select the tab Funds Transfer (Other Bank Account).
Step 3: Select Debit/Credit Account, IMPS as the transfer method, and the recipient’s account.
Step 4: Enter the transfer amount and click the submit button.
Step 5: Click the confirm button.
Step 6: Double-check all the details and authorise the transaction using the OTP (one-time-password) sent to your registered mobile number.
Step 7: Finally, confirm by clicking the submit box.
IMPS transfer limit
The minimum amount is as low as Rs 1. Banks can set their maximum limit for IMPS as they think acceptable.
IMPS time taken
It is based on real-time. The recipient account is credited in less than 1 minute following the submission of the transaction.
UPI
UPI or Unified Payments Interface is one of the easiest methods of transferring money from one bank to another.
How to do a UPI transaction?
To complete the transaction, all you need is a smartphone and a steady internet connection. VPA, or Virtual Payment Address, is used in this operation.
The advantage is that you do not need to carry any information about the receiver’s bank account.
You only need their registered mobile number with UPI or their name instead of their bank account number and IFSC code. You can also use this way to transfer money at any time; it is available 24 hours a day, seven days a week.
UPI transfer limit
UPI allows you to make transactions of up to one lakh rupees hence you cannot use this technique for huge transactions.
UPI time taken
The transferred amount shall reflect instantly.
Cheque
Although it is a conventional technique of transferring money from bank to bank, many individuals find it to be a convenient option.
How to do a Cheque transfer?
Step 1: Simply write your name in the payee area of the cheque you’ve written.
Step 2: Enter the receiver’s bank account number and the amount to be transferred.
Step 3: Don’t forget to sign the check, making sure it matches the signature on your bank account.
Cheque transfer limit
Transferring money by cheque has no upper limit, however, the receiver may face constraints during the withdrawal process. One is not permitted to withdraw more than 50,000 at branches other than his branch.
Cheque time taken
When done within the bank, the process is more clear and more immediate. Other banks, on the other hand, may require the receiver to wait two to three days.
Conclusion
You must have a good understanding of the various types of money transfer services in India by now. All that remains are for you to select the method that best meets your needs. If you need to send a modest amount of money quickly, IMPS or UPI will be ideal. However, for larger transactions, RTGS may be used. If you are having problems with your online banking or mobile banking, you can use cheque transfers. Remember to double-check all of the receiver’s information before proceeding with the transaction, otherwise, you may lose money. Don’t worry too much; select the best option and enjoy the simple process of money transfer.
FAQs
1. What are the different types of money transfer services in India?
Ans: There are 4 major types of money transfer services namely NEFT, RTGS, IMPS, and UPI.
2. What is the IMPS transfer limit?
Ans: The minimum amount transferable via IMPS can be as little as Re.1.
3. Are there any additional fees for an IMPS transfer?
Ans: To boost digital transactions, the Finance Ministry of India has eliminated all additional fees for IMPS money transfers.
4. What is the difference between NEFT and IMPS?
Ans: The difference between NEFT and IMPS is that NEFT is operated by RBI, whereas IMPS is managed by the National Payments Corporation of India (NPCI).
5. Which is a faster method of money transfer between NEFT and RTGS?
Ans: The fastest payment method will depend on the urgency and size of your transaction. The RTGS method is a more efficient and faster method for payments exceeding Rs.2 lakhs. In contrast, NEFT is more efficient for small payments.
6. Is the RTGS payment method secure?
Ans: The government monitors RTGS, which is a highly safe and secure means of payment. It is even more secure because it is mostly utilised for larger-amount money transfers
