The banking systems have changed dramatically over the last few years. After the emergence of NEFT, RTGS, and IMPS, the way we transfer money has changed.
The method of transferring money has become much easier since the development of new technologies. The various settlement systems allow funds to get transferred from one bank account to another in seconds. However, some of them still using UPI and cancelled cheques for bank account verification/
It benefits several businesses, customers, and banks by helping them to make faster payments and reduce their workload. It also bridges the gap between customers, entities, businesses, and other people and organizations.
Term definitions for online money transfers
- Availability of services: These fund payout systems have specific operating hours, while others are available 24X7. Users can transfer money immediately and on any day using available services. However, you must further note that the fund will only settle if the service is operational.
- Charges for fund transfers: This is the fee that any bank charges for the transfer of money, the speed of the transmission, and other similar services provided to the user. These fees for payment transfers are set by the banks individually, following RBI guidelines.
Understanding NEFT, RTGS and IMPS
To understand the difference between NEFT, RTGS, IMPS, and other payout options, it is essential to know more about these processes in detail.
So let’s get started.
1. NEFT( National Electronic Funds Transfer)
You can transfer any sum to the user’s account using NEFT on a one-to-one basis. The amount of money that can be moved- in a single day is not limited to NEFT transactions.
- Timings for NEFT transfers
The NEFT platform is available 24 hours a day, every day of the year (24x7x365). Money is transferred in batch size and settled in 48 half-hourly time frames.
- Transfer thresholds for NEFT
The amount of money that can be transferred- through NEFT has no upper or lower limit. You can use NEFT to conduct transactions to send money from one bank account to another in India. You must, however, ensure that the banks are NEFT-enabled.
How to make an NEFT transfer?
To make an NEFT transfer, all you have to do to send money via NEFT is sign into your online banking website and add the receiver as a beneficiary.
In the Add New Beneficiary section, you’ll need to fill in the information, like their name, payment details, type of account, and IFSC code. The fund transfer- will be finished once you select NEFT as the preferred method of transfer and enter the amount to get conveyed.
2. RTGS (Real Time Gross Settlement)
Business owners can use RTGS when large sums need to be transferred quickly. The fact that the entire sum is transferred in real-time gives RTGS a benefit over the other techniques.
- Timings for RTGS transfers
RTGS is accessible for client and inter-bank transactions around the clock, except for the intermission between the end-of-day and start-of-day procedures, which will be broadcasted- via the RTGS system.
- Transfer limits for RTGS
For RTGS exchanges, there is a minimum limit of Rs. 2 lakhs and no fixed amount. You can apply for an RTGS-enabled account by contacting your bank or checking your qualifications on your online banking gateway. If you’re using RTGS to transfer funds, make sure both you and the receiver have an RTGS-enabled bank account.
How to make an RTGS transfer?
To make an RTGS transfer, log in to your banking gateway and add the receiver as a beneficiary by entering their name, bank account, type of account, and IFSC code. The fund transfer will start processing only after selecting RTGS as the transfer mode and entering the amount you wish to transfer.
3. IMPS (Immediate Payment Service)
IMPS is another real-time payment service available 24 hours a day, seven days a week, and even on bank holidays. You can quickly transfer comparatively smaller amounts, up to Rs. 2 lakhs, using IMPS.
Hence it is best to consider IMPS to be the money transfers mode that combines the best characteristics of both RTGS and NEFT. You can transfer as little as you want, whenever you want, with quick results.
Though most IMPS facilities get used online, a few banks also provide SMS services. Confirm with your bank to see if SMS IMPS transfers are supported.
The National Payments Corporation of India provides the IMPS facility. Customers can use their assistance to transfer funds between banks and Prepaid Payment Instrument (PPI) lenders.
PPIs are tools that enable you to use the value stored in the PPI to buy goods or services or activate fund transfers. Chip cards, magnetic stripe cards, electronic wallets, and vouchers are examples of PPIs. People without checking accounts can use PPI to transfer funds via IMPS.
How to make an IMPS transfer?
To send money using IMPS, you must first download the bank’s mobile banking services and obtain a Mobile Money Identifier (MMID) and MPIN. You must also ensure that your receiver or recipient has the MMID.
After registering, log in to your online banking portal and choose IMPS as your preferred transfer method. Then enter information such as the user’s mobile number, MMID, sum to be transferred, and your MPIN. You will receive an email confirmation message once this gets completed.
Online money transfers are dependable, quick, and convenient. You can simply move funds using these resources without waiting in long lines to make withdrawals or try to be physically available at the bank. They also provide options and flexibility.
Also, with the onset of innovative technology, the ever-changing business climate becomes even more vibrant. Hence to contend in this digitally changing marketplace, it is crucial to stay up to date with the payment options modified regularly by the governing body.
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Frequently Asked Questions
The faster form of payment depends on the urgency and the amount of your transaction. If you have a transaction above Rs. 2 lakh, RTGS is a faster and more effective mode of payment. However, for any payments which are of lower amounts, NEFT is a more efficient mode of payment.
Using IMPS, you can transfer comparatively lower amounts, up to Rs. 2 lakhs, instantly. So, you can think of IMPS as the fund transfer mode that has the best features of both RTGS and NEFT. You can transfer amounts as low as you want, any time you want, with instant results.
Immediate Mobile Payment Services(IMPS) is a real-time instant inter-bank funds transfer system managed by the National payment corporation of India. IMPS is available 24/7 throughout the year including bank holidays, unlike NEFT and RTGS. The bank account details include the beneficiary’s name and bank’s IFSC.
Similar to the other options, this is a safe and secure system to transfer money in India. Unlike IMPS, RTGS only settles during banking hours. Unlike the other two options, RTGS is primarily reserved for large transactions as the minimum per transfer is ₹200,000.
NEFT and RTGS are free of charge if done online using net banking as of November 2017. Following are the charges for IMPS as well as NEFT and RTGS transactions made through bank branches. IMPS charges are applicable on online transactions too.