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Know the difference between NEFT and RTGS before transferring money

  • The window for making RTGS transactions is from 9am to 4:30pm on weekdays and 9am to 1:30pm on Saturdays. RTGS is meant for large transactions
  • NEFT operates from 8am to 6:30pm from Monday to Saturday. NEFT does not have a minimum transfer limit

If you use your Netbanking facility to transfer funds, you would be familiar with the options of NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement). But do you know about the associated charges and other details about these money transfer facilities or the difference between them? Both RTGS and NEFT are real-time payment systems maintained by the Reserve Bank of India (RBI), but there are several major differences in how the two operate.

Transaction windows

The window for making RTGS transactions is from 9am to 4:30pm on weekdays and 9am to 1:30pm on Saturdays. NEFT operates from 8am to 6:30pm from Monday to Saturday.

While the timings may vary slightly from bank to bank, NEFT transactions are less restrictive when it comes to timing. However, keep in mind that NEFT settlements happen in batches, so there might be a slight delay for the actual transfer to take place from the time you place the request for transfer. RTGS transactions, on the other hand, happen in real time. Here, the beneficiary bank receives the instruction to transfer funds immediately when you carry out the transaction, and the transfer is instantaneous.

Costs and restrictions

RTGS is meant for large transactions. The minimum amount that can be remitted through it is 2 lakh, and there’s no upper ceiling.

NEFT, on the other hand, does not have a minimum transfer limit. For bank account holders, the limit is 10 lakh per transaction with no upper limit on the number of transactions. However, there is an upper limit of 50,000 for individuals who do not have a bank account but are using the NEFT facility to deposit and transfer cash through NEFT-enabled bank branches.

As with most bank services, fund transfers incur a small fee. According to the upper limits set by RBI, in the case of NEFT, the charge for transfers of up to 10,000 is up to 2.50 per transaction. For transfers of 10,000 to 1 lakh, the charge is up to 5; for Rs1 lakh to 2 lakh, it is up to 15; and for transfer above 2 lakh, the charge is up to 25. In the case of RTGS, you can be charged 25-30 for transactions of 2 lakh to 5 lakh; and 50-55 for transactions above 5 lakh. Keep in mind that the actual charges can vary from bank to bank, so it is advisable to check your bank’s website before you transact.

Both are similar in terms of the process of transfer. They require you to add the beneficiary bank account to your account first and then wait for activation. After the beneficiary is confirmed, you can start transferring funds to the desired account.

What to watch out for

While these payment systems have been designed to make the process of transferring funds quick and easy, be careful about whom you are transferring money to and enter the details correctly.

Since RTGS transactions occur in real time and the settlement happens in RBI’s books, all payments are final and irreversible. For NEFT transfers too there is no option of stopping payment once a transfer has been initiated by the bank. So one small mistake could result in a big loss.

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