NEFT Full Form in Banking: NEFT Meaning, Benefits & Use

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What is NEFT in Banking Terms

NEFT is an electronic money transfer system that was introduced by the RBI (Reserve Bank of India). The NEFT full form in banking jargon is ‘National Electronic Funds Transfer.’ It is one of the most secure and fastest mediums used by individuals to transfer money. With this medium, you can send money within just a few minutes. There is no time limitation to using this mode to send cash as it is available 24*7 and 365 days. .

What Details are Required for NEFT

In order to transfer money through NEFT banking, you must first add the person or organisation to whom you want to send money as a beneficiary. 

Following are the details required for NEFT:

  • Name of the account holder to whom you want to send funds

  • Account number

  • Bank name

  • Branch name

  • Branch IFSC code

  • Amount details

After adding a beneficiary, you are required to wait for a few minutes/hours to get it activated by the bank. Once it gets activated, you can perform transactions. 

How NEFT Works

NEFT is used for sending cash quickly. The approach follows a step-by-step guide to complete a transaction. Here are the details about the same. 

  • The first step is adding a beneficiary. 

  • Once a beneficiary is added, the bank takes a few minutes/hours to activate it. 

  • After activation, you may send funds.

  • After you execute an NEFT transaction, your bank generates a message and transmits it to its NEFT service centre.

  • The message is then transferred from the NEFT service centre to the RBI-operated NEFT clearance centre.

  • The clearance centre then arranges payment processing requests by the recipient bank and creates a financial entry to deduct money from the sender and credit them to the recipient's account.

  • Following that, a payment message is issued to the recipient banks via their NEFT service centre.

  • Lastly, the recipient bank receives the clearance centre's inbound transfer notifications and credit amount into the beneficiary's accounts.

How to Pay Credit Card Bill Using NEFT

Here are the steps to follow to pay credit card bills using NEFT.

  • Log in to your net banking account with your credentials.

  • You will see a tab of ‘Add Payee’ on the main page. Click on that.

  • Now, enter your credit card details such as the name on the card, bank name, account number, IFSC code, and so on. 

  • Once all of the information has been filled in, click the 'Submit' button.

  • Go to the 'NEFT Funds Transfer' section once your credit card has been registered as a 'Payee.'

  • Choose your credit card as a payment method and input the total amount to be sent using NEFT and click on ‘Submit.’

  • Following that, you will receive an OTP on your phone. Enter that to complete the transaction. 

Who is Eligible to Transfer Money Via NEFT from One Bank to Another

Any individual, corporation or firm having a current or savings account is eligible to transfer money through NEFT. This approach may be used to transfer funds from one account to another within the same bank, as well as between accounts from other banks.  However, in order to complete a transaction successfully, you must enter the required details correctly.  Any errors in the information might cause a transaction to fail.

Features and Benefits of NEFT 

Here is the list of multiple advantages of NEFT.

  • It is one of the fastest and most secure methods to transfer money.

  • It allows to send money from one account to another within the same bank, as well as between accounts from other banks. 

  • You can use this method 24*7 and 365 days.

  • The amount will be deposited into the beneficiary’s account within just a few minutes.

  • You can do a transaction just by logging into your net banking account. As a result, your time and effort will be saved. 

  • It is a paperless facility.

FAQs about NEFT

  • ✔️What is an NEFT transfer?

    NEFT is an electronic mode used to transfer money. You can perform a transaction through NEFT by logging into your net banking account. However, in order to use this mode, you must add the person or corporation as a beneficiary.

  • ✔️What is the full form of NEFT?

    The NEFT full name is National Electronic Funds Transfer.

  • ✔️What are the benefits of NEFT?

    NEFT is one of the secure and fastest electronic payment transfer methods It is a well-organised service, and payments are processed in batches. It is a paperless service which is available online.