.gif)
.webp)
.svg)
Key Highlights
- NEFT and RTGS both enable seamless money transfers quickly and securely.
- NEFT vs RTGS i.e. the difference between NEFT and RTGS is largely due to the related transaction value and settlement time.
- In NEFT, you can expect the transfer to be completed within two hours of batch settlement. In RTGS, the transfer usually gets completed on a real-time basis.
- While there is no limit on the fund transfer in the case of NEFT, some banks may have a transaction limit.
- On the other hand, RTGS supports high-value transactions with a minimum value of ₹2,00,000.
NEFT and RTGS are two of the commonly used modes of money transfer. Both enable an efficient and secure fund transfer process and play a key role in India's digital payment ecosystem.Through this blog, you'll learn about NEFT and RTGS and how they differ from each other. Having a clear understanding of NEFT vs RTGS (i.e. the difference between NEFT and RTGS) helps identify the most appropriate method that best suits your needs.Before directly jumping into NEFT vs RTGS, let’s look at the individual features of NEFT and RTGS.
What is NEFT?
NEFT stands for National Electronic Funds Transfer and is a nationwide centralised payment system, owned and operated by RBI. Here are some of its key features that will help you understand the key difference between NEFT and RTGS:
- Availability: NEFT is available round the clock on all days. In other words, you can initiate the transfer 24X7X365, without having to worry about bank holidays.
- Transaction Value: Normally, there is no limit on the amount of funds you can transfer. Some banks may have a transaction limit; thus, it is advisable to check with your bank.
- Transaction Settlement: NEFT operates in batches at half-hourly intervals throughout the day. The beneficiary is likely to receive the credit within two hours of the batch settlement.
- Fund Transfer Process: You can initiate fund transfers online and offline.
- Charges: The charges are levied as per RBI’s directives; hence, you may check with your bank to know the charges applicable in your case.
What is RTGS?
The full form of RTGS is Real Time Gross Settlement and the fund settlement takes place in the books of RBI. It facilitates a continuous and real-time settlement of money transfers. Here are the features of RTGS that highlight the difference between NEFT and RTGS:
- Availability: You can avail of RTGS services at any time, at your convenience. Like NEFT, RTGS is also available 24x7x365.
- Transaction Value: RTGS primarily supports high-value transactions with ₹2,00,000 as the minimum transaction value. Also, there is no upper limit on the transfer.
- Transaction Settlement: As soon as the remitting banks transfer the funds, beneficiary banks normally receive the funds on a real-time basis. You must note that they are expected to credit the beneficiary's account within 30 minutes of receiving the funds transfer message.
- Fund Transfer Process: Like NEFT, you can initiate fund transfers through your mobile or internet banking account or by submitting the request to the nearest branch.
- Charges: Here too, the charges are levied as per RBI guidelines. Talk to your bank to know more about the applicable charges.
What Are the Details Required for NEFT and RTGS Transfers?
As seen above, both NEFT and RTGS have several common features. Also, you need similar details to initiate fund transfers.These include:
- Beneficiary Name
- Bank Name
- Account Number
- Bank Branch
- IFSC (Indian Financial System Code)
Please note that if you are transferring funds online to a specific beneficiary for the first time, you will have to add the beneficiary to your account. This is to help you initiate money transfers.
NEFT vs RTGS - What Is the Difference?
After having learned about both transfer modes individually, let’s discuss NEFT vs RTGS i.e. the difference between NEFT and RTGS.While they have similar features, the difference between NEFT and RTGS is largely on the parameters specified below:
| NEFT vs RTGS | ||
| Particulars | NEFT (National Electronic Funds Transfer) | RTGS (Real Time Gross Settlement) |
| Transaction Settlement | Within two hours of batch settlement. | Transaction on real-time basis. |
| Transaction Value | No limit on the fund transfer, some banks may have a pre-defined transaction limit. | High-value transactions with ₹2,00,000 as the minimum. |
Going by the above NEFT vs RTGS table, it can be said that NEFT is suitable for smaller transaction values, and RTGS is the preferred choice for high-value transactions.
NEFT vs RTGS - Which One Is Better?
After knowing about NEFT vs RTGS, you might want to know which mode of transfer is better.Before choosing between the two, consider the associated charges, transaction value, and urgency.For instance, NEFT is usually used for low-value transactions. On the other hand, if the transaction is urgent, then RTGS makes sense as it facilitates a real-time transfer.
Choose the Transfer Mode As Per Your Requirement
NEFT and RTGS, both enable seamless fund transfers. However, as cited above, you must evaluate the NEFT vs RTGS i.e. difference between NEFT and RTGS and choose the mode that best suits your needs.Choices are always subjective and are influenced by several personal needs. This is similar to the personal influences you experience during financial planning, where you make choices based on your needs.The needs of every individual are unique and so should the financial plans. You can create a personalised investment portfolio with investment tools like mutual funds for your long-term and short-term needs. Also Read: 5 Ways to Transfer Money from One Bank to Another
FAQS - FREQUENTLY ASKED QUESTIONS
What is NEFT?
NEFT is an electronic fund transfer system. It is also one of the fastest and most secure ways to transfer money on a near-real-time basis.
What does RTGS stand for? What does it mean?
RTGS stands for Real Time Gross Settlement. This mode of money transfer enables real-time settlement.
Can you explain NEFT vs RTGS i.e. the difference between NEFT and RTGS?
Both NEFT and RTGS facilitate quick and secure money transfers. However, they are different largely due to the involved transaction value and settlement time.
NEFT vs RTGS - Which one is better?
There is no direct answer to this. You can choose the fund transfer mode basis the transaction value involved and the urgency of transfer. Also, do account for the related charges.
What are the charges for NEFT and RTGS transfers?
The charges are as per RBI directives. Talk to your bank to understand the applicability of charges in your case.
NEFT vs RTGS - What is the difference wrt transaction value?
There is normally no limit on the fund transfer amount for NEFT. However, some banks may have a pre-defined transaction limit. On the other hand, the minimum transfer amount for RTGS should be ₹2,00,000.
I want to execute a high-value transaction. Which mode of transfer is better?
In the case of high-value transactions, RTGS is the preferred choice. Please note that the minimum transfer amount in RTGS is ₹2,00,000.
NEFT vs RTGS - How are the two different in the case of settlement time?
In NEFT, you can expect the beneficiary to receive the amount within two hours of batch settlement. This system operates in batches at half-hourly intervals throughout the day. On the other hand, you can expect a real-time settlement in the case of RTGS.
I urgently need to transfer funds. Which transfer mode should I use?
RTGS facilitates real-time fund settlement. Thus, you may consider RTGS when the transaction is urgent.
When can I use RTGS and NEFT services?
You can avail of both services at your convenience i.e. 24X7X365.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
