What are RTGS AND NEFTS?
NEFT: National electronic funds transfer These are electronic payment systems that allow individuals to transfer funds between banks.
Both these systems are maintained by the Reserve Bank of India. It is applicable only for money transfers within the country.
For RTGS, the fund's transfer takes place on a real-time basis at the time the request is received. It is one of the fastest interbank money transfer facilities available through banking in India. The beneficiary bank has to credit the recipient's account within 30 minutes of receiving the fund's transfer message.
The Differences You Need To Know
Between
RTGS AND NEFTS
RTGS is meant for Big value transactions ( more than 500001) while there is no minimum limit for NEFT( maximum 500000)
Electronic payment systems RTGS, NEFT are maintained by RBI
Under RTGS, funds transfer on a real-time basis
NEFT operates on a settlement basis.
According to RBI's circular issued on December 6, here is how the NEFT system will operate:
There will be 48 half-hour batches every day. The settlement of the first batch will commence after 00:30 hours and the last batch will end at 00:00 hours.
The system will be available on all days of the year, including holidays.
NEFT transactions after the usual banking hours of banks are expected to be automated transactions initiated using 'Straight Through Processing (STP)' modes by the banks.
The existing discipline for crediting the beneficiary's account or returning the transaction (within 2 hours of settlement of the respective batch) to the originating bank will continue.
Member banks will ensure sending of a positive confirmation message (N10) for all NEFT credits.
(You can read RBI guidelines click )
All provisions of NEFT procedural guidelines will be applicable for NEFT 24x7 transactions as well.
According to the central bank's press release, this move is aimed at pushing savings bank account customers to transfer money using electronic modes via NEFT.
NEFT operates on a settlement basis.
According to RBI's circular issued on December 6, here is how the NEFT system will operate:
There will be 48 half-hour batches every day. The settlement of the first batch will commence after 00:30 hours and the last batch will end at 00:00 hours.
The system will be available on all days of the year, including holidays.
NEFT transactions after the usual banking hours of banks are expected to be automated transactions initiated using 'Straight Through Processing (STP)' modes by the banks.
The existing discipline for crediting the beneficiary's account or returning the transaction (within 2 hours of settlement of the respective batch) to the originating bank will continue.
Member banks will ensure sending of a positive confirmation message (N10) for all NEFT credits.
(You can read RBI guidelines click )
All provisions of NEFT procedural guidelines will be applicable for NEFT 24x7 transactions as well.
According to the central bank's press release, this move is aimed at pushing savings bank account customers to transfer money using electronic modes via NEFT.
Individuals who do not have a bank account can also deposit cash at the NEFT-enabled branches. However, such cash remittances will be restricted to a maximum of Rs 50,000 per transaction.
Charges are different according to the bank
No charges on online NEFT transactions
RBI has mandated banks not to charge any fees on NEFT transactions done by savings account holders from January 1, 2020
And Rs40 per transaction on RTGS
Before doing RTGS or NEFTS ask the bank which is favorable for you.
And how the formalities of fill up forms because there has a different rule in a different bank.
Key Differences Between RTGS and NEFT (2024 Update):
1. Purpose:
- RTGS: Used for high-value transactions, where the minimum amount is ₹2 lakh (₹200,000). There's no upper limit.
- NEFT: Suitable for lower-value transactions with no minimum limit, though some banks may impose a maximum cap of ₹10 lakh (₹1,000,000) for online transactions.
2. Transaction Speed:
- RTGS: Funds are transferred in real-time as soon as the request is processed. This is one of the fastest options for interbank money transfers, and the recipient bank must credit the amount to the beneficiary’s account within 30 minutes.
- NEFT: Transactions are settled in batches. There are 48 half-hourly batches per day, ensuring quicker settlement even outside regular banking hours.
3. Availability:
- RTGS: Available on all working days of banks between 7 AM and 6 PM. It is not available 24x7.
- NEFT: Now available 24x7, including weekends and bank holidays, with settlements starting at 12:30 AM and the last one at midnight. This change has made NEFT an around-the-clock service.
4. Processing Time:
- RTGS: Real-time processing without waiting for settlement.
- NEFT: Operates on a deferred settlement basis. Transactions initiated outside banking hours are settled in the next batch.
5. Charges (2024 Guidelines):
- RTGS: Banks may charge up to ₹40 per transaction, but many banks now offer RTGS for free online or waive charges for premium account holders.
- NEFT: Online NEFT transactions are free for savings account holders as per the RBI’s directive (effective from January 1, 2020). However, charges may apply for offline NEFT transactions conducted at branches.
6. Non-Account Holders:
- Individuals who do not have a bank account can use NEFT to deposit cash at an NEFT-enabled branch. The maximum limit for such cash remittances is ₹50,000 per transaction.
7. NEFT 24x7 Features:
- STP Mode: Transactions initiated outside regular banking hours are automated via the 'Straight Through Processing' (STP) system.
- Positive Confirmation (N10 Message): Banks are required to send a confirmation message for all NEFT credits to ensure transparency and completion of transactions.
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