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Difference Between IMPS, NEFT, and RTGS: Meaning and Complete Guide

Difference Between IMPS, NEFT, and RTGS

The banking industry’s technological breakthroughs are altering daily interactions and corporate transactions. Today, you may easily make an NEFT or IMPS transfer instead of giving a customer cash in person. Numerous financial operations can be done online or without physically visiting a bank location. These developments are quickly changing how people and organisations perform banking operations today. In order to transfer and receive payments seamlessly, organisations employ payment aggregators nowadays. While there are numerous methods of money transfer, including UPI, digital wallets, cheques, etc. This article will explain the differences between IMPS, NEFT, and RTGS.

Three digital payment options—IMPS, NEFT, and RTGS—are seen to have transformed the Indian banking sector. The general public has been informed about new and better ways to start banking operations while still having control over their accounts and doing so from the convenience of their homes.

Merchants can quickly move money electronically from one bank account to another using digital payment systems like IMPS, NEFT, and RTGS. Let’s examine these various forms of electronic fund transfer systems and learn how they differ from one another.

What is IMPS?

The National Payments Corporation of India provides an online money transfer service known as IMPS. It makes it possible for both people and businesses to electronically move money across bank accounts. IMPS transactions happen instantly, and the service is offered 365 days a year.

The following are features of IMPS:

  • The daily maximum limit for IMPS transactions is Rs. 1 lakh.
  • The fees for IMPS transactions range from Rs. 5 to Rs. 15, depending on the terms set forth by the bank.
  • Additional service taxes may also be applied to IMPS transactions.
  • A reliable real-time fund transfer alternative that provides 24-hour interbank fund transfer capability is an immediate payment service.
  • With IMPS, consumers may instantly transfer money between banks nationwide in a way that is both secure and cost-effective.
  • Both internet banking and mobile platforms are compatible with the quick payment service.
  • You can use the instant payment option whenever you choose, including on weekends and holidays.
  • Through IMPS mobile platforms, users can only add beneficiaries by supplying the recipient’s mobile number and MMID (Mobile Money Identifier)
  • Mobile phone-based IMPS transactions do not need bank account details.
  • The bank notifies the payer and payee right away after an IMPS transaction is complete.
  • IMPS can be used for a variety of financial transactions, including mobile banking, receiving payments, paying other merchants, and transferring money between bank accounts.

IMPS transactions function as follows:

  • Log in to your internet banking or mobile account.
  • Select the “Fund Transfer” option from the primary page that opens.
  • Make “IMPS” your choice for a fund transfer mechanism.
  • To continue, enter your MPIN and the MMID of the beneficiary.
  • Put in the necessary transfer amount.
  • Select “Confirm”
  • You might be required to input the OTP that was issued to your registered mobile phone number in order to authenticate the transaction.
  • Complete the transaction by entering the OTP.

Difference Between IMPS, NEFT, and RTGS

 

What is NEFT?

Another method of transferring funds is NEFT, or National Electronic Funds Transfer, conceived of and carried out by the Reserve Bank of India (RBI). It makes it possible for people and businesses to electronically transfer money between bank accounts. It is a centralised payment system that is open 365 days a year. Additionally, you can ask for NEFT transfers by going to your bank’s branch.

The following are features of NEFT as a method of money transfer:

  • NEFT is a one-to-one payment system.
  • Only banks that provide NEFT-enabled services can process NEFT transactions.
  • It is implied by the fact that NEFT transactions are not real-time and that they take a few days to complete.
  • Prior to December 2019, the RBI set specific hours for processing NEFT transactions. However, starting from January 2020 NEFT services are available round the clock, even on holidays.
  • You must enrol beneficiaries on your necessary bank’s internet banking interface before you may send money using NEFT.
  • The number of NEFT transactions is unrestricted.
  • There is a cost associated with every NEFT transaction, which can be anywhere from Rs. 2.5 and Rs. 25 depending on the amount being transferred.
  • According to RBI norms, NEFT payments are processed and cashed in batches every half-hour.

NEFT transactions function as follows:

  • Log in to access your online banking account.
  • Select “Fund transfer” on the home page.
  • Choose “NEFT” from the drop-down option that appears.
  • If you haven’t previously, please take note that you must ‘Add beneficiary’ to the beneficiaries list in your account.
  • You must select the “Add beneficiary” option on the page in order to add a new beneficiary.
  • Enter the necessary information about the beneficiary, including his or her name, bank account number, IFSC, etc.
  • Select “Confirm” or “Add.”
  • You will be required to enter the OTP issued to your registered mobile number in order to verify this step.
  • Following that, your action would be completed. It will take approximately 24 hours before a beneficiary can be added.
  • You must choose the beneficiary’s information (to whom you need to send the money) from your list of beneficiaries after the beneficiary has been added to your account.
  • Enter the necessary transfer amount, then confirm the transaction.
  • The sum will be sent from your bank account to the others when you click “Confirm.”

What is RTGS?

Another payment method that lets you send money from one account to another is known as RTGS or real-time gross settlement. However, RTGS is solely intended for high-value transactions, in contrast to the other two payment methods. That is to say, the transferrable amount must be at least Rs.2 lakh.

The following are features of RTGS:

  • The processing of transactions conducted using RTGS is done on a one-to-one basis.
  • The RTGS facility is available 24/7, every day of the year.
  • Real Time Gross Settlement is mostly employed for high-value transactions.
  • You can utilise the RTGS service in both online and offline modes.
  • RTGS is a safe and secure way to transfer money because it is operated by the Reserve Bank of India.
  • RTGS enables real-time money transfers.
  • On transactions conducted through RTGS, no additional fees are charged.
  • The RTGS services are available 24 hours a day, 365 days a year.
  • Using online banking, RTGS transactions can be started from any location.
  • Because every RTGS transaction is legally supported, the danger of fraud is quite low.

RTGS transactions function as follows:

  • Log in to access your online banking account.
  • Select “Fund transfer” on the home page.
  • Choose “RTGS” from the drop-down selection that appears.
  • If you haven’t previously, please take note that you must ‘Add beneficiary’ to the beneficiaries list in your account.
  • You must select the “Add beneficiary” option on the page in order to add a new beneficiary.
  • Enter the necessary information about the beneficiary, including his or her name, bank account number, IFSC, etc.
  • Select “Confirm” or “Add.”
  • You will be required to enter the OTP issued to your registered mobile number in order to verify this step.
  • Your action would then be processed after that. About 24 hours will pass before a beneficiary can be added.
  • You must choose the beneficiary’s information (to whom you need to send the money) from your list of beneficiaries after the beneficiary has been added to your account.
  • Enter the necessary transfer amount, then confirm the transaction.
  • The sum will be sent from your bank account to the other’s when you click “Confirm.”

Difference Between– NEFT vs RTGS

Differentiating Factor

NEFT
RTGS

Minimum Transferable Amount

Re. 1

Rs. 2 Lakh

Maximum Transferable Amount

There is no restriction

There is no restriction

Settlement Type

Batch settlement of the amount

Amount settled individually

Settlement Time

2 hours

Immediate

Transfer Timings

24/7, 365 days a year

varies depending on the bank

The Transfer Method

Both – online and offline

Both – online and offline

Additional charges
No charges

For outgoing transactions between Rs. 2 lakh and Rs. 5 lakh, the price is Rs. 30, and for transactions over Rs. 5 lakh, it is Rs. 55.

Difference Between– IMPS vs NEFT

Differentiating Factor
IMPS

NEFT

Maximum Money Transfer Limit

Up to Rs. 2 Lakh (Account-based)

Depends on the customer segment

Settlement Type

Batch settlement of the amount

Individual settlement

Time Taken

It can be completed immediately or it could take anything from two hours to two days.

Can only be carried out within bank business hours.

Additional charges

Depend upon the bank and the amount being transferred.

Similar across all banks, however, varies depending on the amount (Ranges between Rs. 2.5 for up to an amount of Rs. 10,000 to Rs. 25 for an amount up to Rs. 2 Lakh)

Difference Between– IMPS vs RTGS

Differentiating Factor

RTGS

IMPS

Settlement Type

Real-time
Real-time
Minimum Transfer Limit
Rs.2 lakh

Re.1

Maximum Transfer Limit

No limit
Rs.2 lakh
Service Timings
Available 365 days 24×7

Available 365 days 24/7

Charges for transactions

No fees are applied to internal transactions. 

Online transactions are free.

Charges for transactions that are sent outside the country: 2–5 lakh rupees, but not more than 25 rupees, Over Rs. 5 lakh: not more than Rs. 50

GST is also essential.

The specific member banks and PPIs decide on the fees for remittance through IMPS. Taxes are incorporated.
Payment Options
Online and Offline

Online

Difference Between IMPS, NEFT, and RTGS

Conclusion

Even while NEFT, RTGS, and IMPS are all equally beneficial and useful, each of these systems has pros and cons of its own. Therefore, based on the amount to be sent, the time period it needs to be settled, additional transaction fees, etc., you must choose one of these two options. For instance, IMPS should be your pick if you need to transfer less than Rs. 2 lakh right away. Similar to this, RTGS can be useful if you need to transfer a sum of money right away that is greater than Rs. 2 lakh.

FAQs

1. What are the most popular ways to transfer money online?

Ans: Online money transfers can be made using RTGS, IMPS, NEFT, UPI, and digital wallets, among other options. Each of these approaches allows for quick and simple money transfers and may be carried out online.

2. Is transferring money free of cost?

Ans: The majority of domestic transactions include free money transfers. On a certain mode of money transfer, some banks may impose a small fee.

3. How long does it take to make an online money transfer?

Ans: It simply takes one day to accomplish an online money transfer. Several money transfer options, including UPI or IMPS, can be finished right away.

4. Which one is faster IMPS or NEFT?

Ans: Among NEFT, RTGS, and IMPS, IMPS has the quickest transaction processing time.

5. When should I transfer money using RTGS?

Ans: The transactions that must be completed in real-time and have a minimum value of Rs. 2 lakh are best suited for RTGS.

6. How do NEFT financial transfers function?

Ans: The NEFT system queues up transactions as they are started by users. These transactions are cleared in batches every hour. It should be noted that NEFT transactions started after bank business hours are automatically regarded as automated transactions started utilising the bank’s Straight Through Process (STP) protocols.

7. How many NEFT transactions are permitted each day?

Ans: Until you reach your bank’s predefined NEFT transfer limit for that specific day, you may complete as many NEFT transactions as you like.

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