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

What is NEFT?

NEFT stands for National Electronic Funds Transfer. It is an electronic payment system that is used nationwide by banks, and allows you to transfer funds from one bank to another. It was conceptualised by the Reserve Bank of India (RBI), and facilitates easy and hassle-free transfer of funds. All NEFT transactions are processed in batches and settled in 30-minute intervals. These transactions can be initiated online, through mobile banking, or by visiting the bank’s branch.

NEFT transfers can be done at any time, as it is available 24/7 throughout the year. Banks may also charge a small fee for each transaction, and the transaction limit varies based on the bank’s policy.

Features and Benefits of NEFT 

NEFT is currently one of the most popular methods of transferring funds online. Considering these transactions are regulated by RBI, they work in accordance with RBI’s guidelines. The following are a few of the features and benefits of NEFT transactions.

• NEFT transactions are reliable and safe, as these transactions are processed through a secure network, and are monitored by the Reserve Bank of India.

• These transactions can be processed between accounts from the same bank, or accounts from different banks offering NEFT-enabled services.

• You can initiate NEFT transactions through various channels, such as online banking and mobile banking.

• You can execute NEFT transactions 24/7 throughout the year, including on Sundays.

• All NEFT transactions are settled within 24 hours. However, the actual time for transaction settlement varies from one bank to another.

• NEFT services are available nationwide.

•  Each NEFT transaction may incur a nominal fee, depending on the transfer amount.

• For transferring funds through NEFT, you must first add the beneficiary through online banking.

• You can use the NEFT service for various purposes, such as online purchases and bill payments.

What Details are Required for NEFT

To transfer funds to individuals or organisations through NEFT, you must first add them to the list of beneficiaries or payees through online banking. To add them as beneficiaries, you must provide the following information.

• The name of the account holder

• Account number

• Bank name

• Name of the bank branch

• The IFSC code of the bank branch

• The amount you wish to transfer

Once you submit the details, you must wait a few hours (depending on the bank’s policy) for the new beneficiary to be added to the list. You can then transfer funds via NEFT.

How Does NEFT Work?

Through the NEFT service, you can easily transfer funds from your account to another account within the same – or a different bank. You can follow the steps given below to execute an NEFT transaction.

• Sign in to your online banking account using your credentials.

• Click the ‘Funds Transfer’ tab on the main page.

• Select ‘NEFT’ from the different transaction types.

• If you are transferring funds to a new beneficiary, you must first add them to the list of beneficiaries.

• Click ‘Add Beneficiary’ to add a new beneficiary.

• Enter the required details, such as their name, account number, IFSC Code, etc.

• To confirm, provide the OTP you receive on your registered number.

• Depending on the bank's policy, the new beneficiary will be added within 24 hours.

• Once the new beneficiary is added, select them as the payee from the list of beneficiaries.

• Enter the amount you wish to transfer and provide the OTP to confirm the transaction.

• Click ‘Confirm’ to transfer the funds via NEFT.

How to Pay a Credit Card Bill Using NEFT

You can pay your credit card bills seamlessly through NEFT. Here are the steps involved in making credit card bill payment using this service.

• Step 1: Sign in to your net banking account using your credentials.

• Step 2: Click ‘Add Beneficiary’ to add your credit card as a payee.

• Step 3: Enter your credit card details, such as your credit card number (in the account number field), IFSC Code, etc.

• Step 4: Click ‘Submit’ to add your credit card as a beneficiary.

• Step 5: Once your credit card is added to the list of beneficiaries, go to the ‘Funds Transfer’ tab, and select ‘NEFT’.

• Step 6: Select your credit card as the payee, and enter the bill amount.

• Step 7: Enter the OTP you receive to confirm the transaction, and click ‘Submit’.

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

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

What is NEFT Inward?

NEFT Inward is a banking term that refers to the process of receiving funds through the NEFT service. As per RBI’s website, NEFT is a payment system that allows one-to-one funds transfers. When someone transfers funds to your account via NEFT, it is called an NEFT Inward transaction. This implies that the funds are being transferred from the sender’s account to your account.

You can deposit cash through the NEFT facility if you do not have a savings account. However, cash remittances are restricted to ₹50,000 per transaction. Furthermore, the fund transfer request settlements are done in batches every 30 minutes. These batches run from 8 A.M. to 7 P.M. on all working days (except for the 2nd and 4th Saturdays of the month).

Depending on the time of day the transfer is initiated, the funds will be credited to the payee’s account within 24 hours.

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