Difference between NEFT, RTGS and IMPS

IMPS vs NEFT vs RTGS

Technological advancements have made banking significantly easy and hassle-free. Today, you can complete a host of banking tasks without actually having to visit the bank. These advancements have been especially useful for sending and receiving money. With digital payment systems such as NEFT, IMPS, and RTGS, you can transfer funds electronically from one bank account to another with the click of a few buttons. To understand this better, let us take a look at these different methods of electronic fund transfer and the difference between the three. These three modes of payment can be used for making your debit card and credit card payments.

What are IMPS, NEFT, and RTGS?

When it comes to transferring funds online, the three most common methods are:

1. NEFT (National Electronic Funds Transfer)

2. RTGS (Real-Time Gross Settlement)

3. IMPS (Immediate Payment Service)

1) NEFT

NEFT is a centralised payment system, operated by the Reserve Bank of India, that allows the electronic transfer of money from one account to another. It has pan-India coverage and is available round-the-clock.

2) RTGS

RTGS is a payment system that allows the immediate transfer of funds from one account to another. Such transactions are carried out in real-time and on a gross basis. However, it is important to note that as it is designed for high-value transactions, the transferable amount must be equal to or more than ₹2 lakh.

3) IMPS

IMPS is a service offered by the National Payments Corporation of India (NPCI) to transfer funds electronically from one bank to another. The transactions occur in real-time and the service is available round-the-clock.

IMPS, RTGS, and NEFT Difference

• NEFT vs RTGS

The primary difference between NEFT and RTGS is in the way the transaction is processed. In the case of NEFT, the transactions requested are processed in batches at a particular cut-off time specified by the bank. As a result, an initiated transaction must wait until the next cut-off time to be processed. However, this is not the case with RTGS. With RTGS, the transactions requested are settled individually and not in batches. As a result, a transaction will be processed instantly as long as it is within the business hours of the bank.

• IMPS vs NEFT

The two 24*7 services - NEFT, which gets completed within 2 hours, and IMPS, a real-time fund-transfer service, have certain differences. The former, a centralized payment system, is operated by RBI, while the latter, a money transfer service, is managed by NPCI. As long as the money is transferred online in case of NEFT transactions, no charges are levied. However, IMPS transactions are chargeable. There is no upper and lower transaction limit for NEFT, while IMPS has a maximum transaction limit of Rs. 20,000. NEFT is available, both, online and offline, while IMPS is only available online.

• RTGS vs IMPS

While IMPS transactions have no minimum limit, RTGS requires you to only carry out high-value transactions upward of ₹2 lakh.

There is also a difference between NEFT and RTGS and IMPS when it comes to management. While RTGS and NEFT fall under the purview of the Reserve Bank of India, IMPS is managed by the National Payments Corporation of India.

What Should you Consider Before Initiating a Fund Transfer?

Now that you know the difference between RTGS, NEFT, and IMPS, let us take a look at the key points you need to consider before initiating a fund transfer via any of these channels.

• IMPS, NEFT and RTGS are all available 24x7

• As transferring money using these channels attracts certain fees and charges, compare RTGS vs NEFT vs IMPS charges to find the best match

• As the charges are bank-specific, finding the bank that charges the least is key

• When calculating the total fee to be paid, consider the GST charges levied on the transaction

• To be eligible to avail the transfer facility, both banks should be covered under the scheme

• Along with fees, also check the time taken to process the fund transfer requests

• Often, there tends to be a limit on the amount you can transfer from one account to another; however, this varies from one payment method to another.