If you want to electronically transfer money, your bank will broadly give you three options: national electronic funds transfer (NEFT), real-time gross settlement (RTGS) and immediate payment service (IMPS). Here is how these work and their costs.
What are these?
NEFT, RTGS and IMPS allow you to send money from one bank account to another.
Through NEFT, the money gets transferred during the bank’s working hours. Since the fund transfer happens in batches, there can be a delay in money transfer. NEFT operates in hourly batches—there are twelve settlements between 8am to 7pm on weekdays (Monday through Friday) and six settlements between 8am to 1pm on Saturdays. So, when you initiate the transaction, depending on the next settlement batch, the money will be transferred. According to the Reserve Bank of India (RBI) website, there is no maximum limit for NEFT money transfer.
RTGS happens in real time and gross basis and is meant for high-value transactions, minimum Rs.2 lakh. The transfer usually happens within 30 minutes from the time of initiation depending on the service window of RTGS. The service windows for RTGS at banks are processed continuously throughout RTGS business hours—8am to 8pm on weekdays and 8am to 3.30pm on Saturdays.
With IMPS the money gets transferred instantly. This service is available 24x7. When you initiate a fund transfer via IMPS, the initiator bank sends a message to IMPS, which debits the money and sends it to the receiving account. All this happens within 5-10 seconds. The maximum that you can send is Rs.2 lakh.
All the three services come at a nominal cost and may vary from bank to bank. When you send money through NEFT, you pay between Rs.5 and Rs.15 depending on the amount. For instance, to transfer up to Rs.10,000 you will pay Rs.2.50. Amounts above Rs.10,000 and up to Rs.1 lakh will attract Rs.5 as charges. To send above Rs.1 lakh and up to Rs.2 lakh, you will pay Rs.15. For amounts above Rs.2 lakh and up to Rs.5 lakh, you will pay Rs.25. Amounts above Rs.5 lakh and up to Rs.10 lakh will attract Rs.25.
For RTGS, the fund transfer charge is in the range of Rs.30-55. According to the RBI website, to transfer Rs.2-5 lakh, a bank can charge up to Rs.30 per transaction and above Rs.5 lakh, not more than Rs.55 per transaction.
In case of IMPS, the cost is left to the discretion of the bank. For transferring money via IMPS, generally banks charge Rs.5 for amounts up to Rs.1 lakh and Rs.15 for amounts above Rs.1 lakh and up to Rs.2 lakh.
All the charges will attract service tax of 14%. When you receive money via NEFT, RTGS and IMPS, you don’t have to pay anything.