Everything you need to know about RTGS, NEFT, and IMPS

Real-Time Gross Settlement, National Electronic Fund Transfer and Immediate Payment Service

When it comes to the electronic transferring of funds in India there are three established methods that you can use. Each one of them has their own benefits and drawbacks to using them. The key is finding the right one that fits in with your given situation. The Indian banking system created these three fund transfer systems; RTGS (Real Time Gross Settlement), NEFT (National Electronic Fund Transfer), and IMPS (Immediate Payment Service).

For this article, we are going to discuss the three methods and offer some details about each one and show how they stack up against the others. We hope that you are able to use the information to decide which of them suits your needs the most.

The RTGS method of fund transfers available to the people in India is a very popular way to make a payment virtually any time of the day. RTGS or Real Time Gross Settlement allows you to send very large sums of money from one account to another. There is a downside in that there is a minimum amount that can be transferred using RTGS. You must send at least Rs. 2 lakhs, but again, there is no maximum amount you can transfer.

In order to be able to send money to another account, each of you must have an RTGS-enabled account. Once you have ensured that the person you are wishing to send the funds must have a qualifying account you are ready to begin. To transfer the funds you must first login to your bank’s website. After getting logged in you need to enter all of the necessary information on the person who will be the recipient like name, account number, account type, and IFSC Code.

National Electronic Funds Transfer also referred to as NEFT provides a high and efficient way to transfer funds between two accounts. There is no minimum or maximum amount of funds that can be transferred. While transfers are not instant and the funds can take a bit of time to complete, you are able to send money 24 hours a day, 7 days a week, and 365 days a year. Using your bank’s account portal you can use the NEFT method to send payments.

There is one important feature of the NEFT method of fund transfers is that you need to verify that the bank you are looking to transfer funds to is part of the same NEFT transfer network. You also need to be aware that the money that is being transferred will not be completed immediately; they are actually processed in batches. To initiate a payment you access your banking portal and set up your recipient as a payee. You need to enter their information including account number, their IFSC code, and select the NEFT as the payment method.

The final method for transferring funds in the Indian banking system is called IMPS (Immediate Payment Service). IMPS is the most unique of all of the three payment methods in that it can be used 24-hours a day, 7-days a week, even on normal banking holidays. Another major benefit of the Immediate Payment Service is it can be used to make smaller payments (like Rs. 2 lakhs).

One thing that sets it apart from the other two payment methods is that IMPS can be used both online and offline. It is also offered by the National Payments Corporation of India and can be either Prepared Payment Instrument or a bank. In certain situations, IMPS payment methods can even be transferred using SMS. Transferring funds via IMPS is fairly simple - you must register with a banks mobile banking service and so does the recipient. You have to access the banking portal and choose the IMPS payment method. Fill in all of the necessary banking information for the recipient. Once sent, you will receive an SMS message confirming the transaction.

What are the major differences between NEFT and RTGS methods of funds transfers in India?

When it comes to comparing the different payment methods that are available under the Indian Banking System the two most contrasting would be the NEFT method versus the RTGS method. These two methods for the most part are polar opposites with one processing payments much slower (NEFT) and the other very quickly (RTGS).

One has no minimum (NEFT) and the other requires at least 2 lakhs (RTGS), however, each one features a no limit on the total amount that is transferable. One is open during the week from 9:00am to 4:30pm and Saturdays from 9:00am to 1:30pm (RTGS) and the other is open at 8:00am to 6:00pm during the week and 8:00am to 12:30pm (NEFT)

What are the major differences between IMPS and RTGS methods of funds transfers in India?

Some of the major differences are discussed below when comparing IMPS and RTGS payment methods. The primary difference between the two when it comes to featuring the best is that while they both have a minimum amount that you can transfer per transaction. The IMPS method has a minimum of Rs.1 and RTGS has a minimum of Rs.2 lakh. The maximum amount that you can transfer is also considerably different. The IMPS has a maximum amount of Rs.2 lakh and the RTGS has no upper level limit.

The IMPS is available for making payments 24-hours a day and 7-days a week, but the availability of RTGS payments will be dependent on the policy of your bank. Also, the IMPS payment option is only available for online banking. However, RTGS payments can be accessed both online and offline.

Which money transfer method is fastest and cost less comparing the NEFT, IMPS and RTGS?

When it comes to judging which of the three payment methods that are part of the Indian banking system, the IMPS method of payment is by far the fastest of the three since payments are processed immediately, however, it comes at a cost. The banks will add transaction fees that the NEFT and RTGS methods do not have additional fees. The NEFT method is the most time consuming of the three ways to transfer money since the funds are bundled together and processed throughout the day. All things considered, the RTGS method would be the best all around option since it is really easy to use, no extra fees for transferring funds and the funds are transferred quickly.