Difference Between NEFT, RTGS and IMPS

Posted on Thursday, November 14th, 2024 | By IndusInd Bank

Digital banking has made it easy to transfer money. Gone are the days of visiting the post office/bank and standing in queues to send money to loved ones far away. Nowadays, with just a few taps and clicks, one can transfer money easily. 

The most common fund transfer options are NEFT, RTGS, and IMPS. You must have probably come across these options when trying to send money via your bank’s branch or online platforms. However, you must have also wondered what NEFT, RTGS, or IMPS exactly is and how each one differs from the other. Here’s a guide on the same. 

Understanding NEFT (National Electronic Funds Transfer)

• So, what is NEFT? National Electronic Funds Transfer or NEFT is a popular and widely used method for transferring funds from one bank account to another within India. 

• NEFT operates in half-hourly batches. So, it is not an immediate transfer method. However, it ensures that the funds reach the beneficiary’s account on the same day. This service is available 24/7.

• It has no minimum or maximum transfer limit. However, banks have the liberty to set limits.  

• To transfer funds via NEFT, you will require the beneficiary’s bank account details, including the IFSC code.

Now that you know what NEFT is, let’s learn what RTGS is. 

Understanding RTGS (Real-Time Gross Settlement)

• RTGS or Real-Time Gross Settlement is the go-to option when you need to transfer large sums of money. 

• As the name suggests, RTGS enables real-time, immediate fund transfers. These are settled individually (gross basis) rather than in batches. This makes it ideal for high-value transactions. 

• RTGS is available during banking hours on all days. However, you can initiate RTGS transactions 24/7 through internet banking.

• RTGS has a minimum transfer limit of ₹2 lakhs and has no maximum transfer limit. Hence, RTGS can be ideal for businesses for making bulk payments or settling invoices from a current account.

After understanding what RTGS is, let’s look at what IMPS is. 

Understanding IMPS (Immediate Payment Service)

• What is IMPS? IMPS or Immediate Payment Service is a fast and flexible fund transfer option. 

• With IMPS, you can instantly transfer funds at any time of the day, even on weekends and holidays. IMPS also operates on a one-on-one basis.

• While IMPS has no minimal transfer limit, the maximum limit is capped at ₹5 lakhs. IMPS is ideal for small, everyday transfers when you need to send or receive money immediately.

Now that you are clear on what IMPS is as well, it is time to dive into the differences between the three fund transfer options. 

Differences Between NEFT, RTGS, and IMPS

Here are some key points that distinguish NEFT, RTGS, and IMPS from each other:

How to Choose Between NEFT, RTGS, and IMPS?

Here’s a quick guide to help you decide:

1. For High-Value Transfers

If you need to transfer a large amount of money instantly, RTGS is the best option. You can be rest assured that the transaction will be processed in real time.

2. For Regular Transfers

NEFT is ideal for non-urgent transfers where you do not need instant settlement. It is secure, reliable, and perfect for routine transactions.

3. For Immediate Small Transfers

IMPS is the best choice for immediate, smaller transactions. If you need to send money quickly without worrying about banking hours, IMPS is the most convenient option.

4. For Business Transfers

If you are operating a business and need to manage multiple payments from a current account, RTGS or NEFT might be better suited for your needs.

With some current accounts, like the Indus Max Current Account, and Indus Premier Current Account by IndusInd Bank, you can enjoy free NEFT/RTGS/ IMPS transfers. This allows you to pay your vendors and suppliers easily, without the worries of recurring charges. 

Also Read: Top Factors to Consider When Choosing a Current Account

Conclusion

Now that you know what NEFT, RTGS, and IMPS individually are, you must have understood that each has its own advantages. Choosing the right one will depend on factors like the transfer amount, urgency, and cost considerations.

With IndusInd Bank’s current account options, you can seamlessly transfer funds and enjoy flexible cash deposit limits, business-friendly digital payment solutions, and more. Open a current account with IndusInd Bank today! 

Disclaimer:

The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.