You’ve finally found your dream home!
Everything is finalized and you’re all set to close the deal. The only thing left is transferring the down payment to the seller.
You pick up your phone to make the payment. But, with so many bank transfer methods available, you need to choose one that ensures the funds are transferred swiftly and securely. Should you choose IMPS, NEFT, or RTGS?
While all three methods allow you to transfer money electronically, they have key differences. Understanding these can be crucial, especially when time is of the essence, and you want to avoid any payment delays.
By the end of this blog, you’ll know exactly which method to use—whether you're transferring money to a seller, paying a friend, or covering school fees. Ready to dive in?
What are NEFT, IMPS, and RTGS?
NEFT, IMPS, and RTGS are all methods to electronically transfer money from one account to another.
Think of them as different modes of transportation—sometimes you need a slow route, other times something faster, or even immediate. Each method offers its own pace and purpose for transferring funds.
National Electronic Funds Transfer (NEFT)
NEFT is a one-to-one transfer system operated by the Reserve Bank of India (RBI) since 2005.
It allows money transfers across India, but the transactions are processed in batches at regular intervals, meaning it’s not instant.
Immediate Payment Service (IMPS)
IMPS, launched by the National Payment Corporation of India (NPCI) in 2010, is perfect for real-time transfers. The funds are credited to the beneficiary’s account instantly, making it the fastest option available.
Real-Time Gross Settlement (RTGS)
RTGS is designed for high-value transactions that require immediate clearance. Unlike NEFT, which operates in batches, RTGS transfers money immediately on a gross basis. This means the funds reach the recipient’s account within minutes.
Difference Between NEFT, IMPS, and RTGS
Now that we’ve got an idea of each of these payment methods, let’s compare them so that you can easily decide which one to use in which situations.
How to Choose Between IMPS, NEFT, and RTGS?
The best method for you depends on factors like fund transfer speed, transaction limits, and convenience. Here’s a breakdown to help you decide:
Transaction Speed
- NEFT: Processes transactions in batches, taking up to a few hours for the funds to reflect in the recipient’s account.
- IMPS & RTGS: Offer instant transfers, with funds reaching the recipient in real time.
Fund Transfer Limits
- NEFT: No minimum or maximum limit, though some banks set their own limits.
- IMPS: Maximum limit of Rs. 5 lakhs per transaction.
- RTGS: Minimum limit of Rs. 2 lakh per transaction, with no upper limit (depends on bank policies).
Charges
While digital transfers are more affordable and reliable, they aren't always free. Here are the charges applicable:
NEFT Charges
Since July 1, 2019, the RBI has eliminated processing fees for NEFT transactions charged to banks. Additionally, starting from January 1, 2020, the RBI mandated that no fees be charged for NEFT online transactions made from savings accounts. The RBI has also waived charges for inward transactions at destination bank branches, ensuring that transferring funds to beneficiary accounts remains free of cost.
If you're doing an outward transaction in other ways (like at the bank branch or through a non-savings account), there could be some minimal fees involved:
- Less than or equal to Rs. 10,000: Rs. 2.5 + GST
- Between Rs. 10,000 and Rs. 1 Lakh: Rs. 5 + GST
- Between Rs. 1 Lakh and Rs. 2 Lakh: Rs. 15 + GST
- Equal to or more than Rs. 2 Lakh: Rs. 25 + GST
IMPS Charges
IMPS charges vary from bank to bank and are largely subject to the amount transferred. The regular IMPS charges range from Rs. 2.5 to Rs. 25 for amounts up to Rs. 5 lakhs.
- Less than or equal to Rs. 10,000: Rs. 2.5 + GST
- Between Rs. 10,000 and Rs. 1 Lakh: Rs. 5 + GST
- Between Rs. 1 Lakh and Rs. 2 Lakh: Rs. 15 + GST
- Between Rs. 1 Lakh and Rs. 5 Lakh: Rs. 25 + GST
Here’s a look at the IMPS charges for some of the major banks in the country:
*These charges are subject to change
RTGS Charges
With effect from July 01, 2019, RBI has waived the processing charges for RTGS transactions for the recipient, but banks can charge a service fee for outward transactions. To ensure banks charge a fair and reasonable fee to transfer money, RBI has mandated a general set of guidelines:
- Inward transactions: Free, no charge to be levied.
- Outward transactions: some text
- Rs. 2,00,000 to Rs. 5,00,000: Rs. 25 or less + GST
- Above Rs. 5,00,000: Rs. 50 or less + GST
Banks can choose to charge a lower rate, but they can't charge more than the RBI's limit.
Network Compatibility
NEFT, IMPS, and RTGS transactions can be processed only between the banks that offer the respective services.
For example, you cannot RTGS to a bank that offers only NEFT services. For an RTGS transfer, both the sending and receiving bank need to be RTGS-enabled. Each bank needs to be a part of the respective system for you to be able to use it to transfer money. Before making a transfer, it's always good to check if both the sender’s and recipient's banks support the service you plan to use.
- NEFT: Available at 216 banks across the country.
- IMPS: Available with 888 members (including banks and PPIs).
- RTGS: Supported by more than 1,60,000 bank branches.
Safety and Security
All three transfer methods—NEFT, IMPS, and RTGS—are highly secure and reliable. They use robust encryption protocols to protect your money and information.
However, it’s always recommended to double-check the recipient’s details before confirming a transaction as incorrect information could lead to delays or even fund loss.
NEFT, RTGS, and IMPS - Which is Better?
At the end of the day, it’s all about your needs. NEFT is perfect for not-so-rush situations. It’s cost-effective and reliable for routine payments like rent, moving money between your own accounts, or making payments that are not urgent. As long as the recipient doesn’t need the funds “right at this second”, NEFT is a solid choice.
On the other hand, IMPS will be your go-to option when you need to transfer money quickly. Whether it’s an emergency bill, paying for something on-the-spot or making time-sensitive payments, IMPS makes sure that the money gets to the recipient immediately.
RTGS is best for transferring large sums of money, widely used for business transactions, real estate purchases, or in any situation where speed and security are important, and a large amount is involved.
Wrapping Up
So, the next time you are in a situation to send money, you’ll know exactly which option to choose. NEFT for no-rush transfers, IMPS for instant money transfers, and RTGS when you’re moving huge amounts!
As digital transactions continue to evolve, businesses are turning to advanced solutions like virtual account numbers (VANs) to simplify their financial processes. Neokred’s Virtual Account Number is an innovative tool that allows businesses to streamline payments by offering unique account identifiers for each customer or transaction, reducing the risk of errors and improving reconciliation.
If you're looking to enhance your transaction management, explore Neokred. It's a smart step towards more efficient, secure, and organized financial operations.
Conclusion
FAQs
These services can be availed 24x7. There’s no limit to the number of transactions that can be done in a day.
The sender has to inform the bank to take immediate action. If the account number doesn’t exist, the money will be reverted to the sender’s account automatically.
IMPS is the fastest option for money transfers, as it processes transactions instantly. RTGS is also quick, with transactions typically completed within minutes.
No, once a transaction is processed, it cannot be reversed or canceled.
NEFT and IMPS have no minimum amount, but RTGS is meant to be used for transactions above Rs. 2 lakh.
