Did You Know | The difference between RTGS and Neft?

Did You Know | The difference between RTGS and Neft?

What is RTGS?

RTGS stands for real time gross settlement, which means that it enables money to move from one bank to another on a real time and gross basis. Simply put, real time means the beneficiary bank receives the instructions for fund transfer immediately and gross means that it is not bunched with any other transaction and settlements of funds transfer instructions happen individually. Since the funds settlement takes place in the books of the Reserve Bank of India (RBI), keep in mind that the payments are final and irrevocable.

What is Neft?

How is RTGS different from Neft?

Timing: As mentioned above, Neft operates in hourly batches. Currently, it has 11 settlements from 9am to 7pm on weekdays and five settlements from 9am to 1pm on Saturdays. So, in case you initiate a transaction after a settlement time you have no option but to wait till the next settlement time. But that’s not the case with RTGS transactions, since they are processed constantly throughout the RTGS business hours.

The service window for RTGS at banks is available from 9am to 4.30pm on week days and from 9am to 1.30pm on Saturdays for settlement at the RBI end. Keep in mind that the timings that each bank follows may vary.

Amount: As far as Neft goes, it does not have a minimum or maximum limit of amount you can transfer. But the maximum amount per transaction is limited to 50,000 for cash-based remittance and remittance to Nepal.

As far as RTGS goes, it is mostly meant for large transactions. The minimum amount that can be remitted through it is 2 lakh. RTGS does not have an upper ceiling for transactions.

Charges: For Neft, inward transactions (when you receive funds via Neft) are free, as no charges are to be levied from the person to whom fund are being transferred to. When you use Neft to make an outward transaction (when you send funds via Neft) at a bank branch for amounts up to 1 lakh, the charge is up to 5 plus service tax. For transactions above 1 lakh and up to 2 lakh, the charge is up to 15 plus service tax. for transactions above 2 lakh, the charges can’t exceed 25 plus service tax.

For RTGS, inward transactions (when you receive funds through RTGS) are free. For outward transactions (when you send funds via RTGS), if the amount is between 2 lakh and 5 lakh, the charges will be up to 30 per transaction. If the amount transferred is above 5 lakh, the charges can’t exceed 55 per transaction.

—Bindisha Saran