If you are an account holder who wants money sent or received instantly, you can opt for digital systems that offer prompt payment. These take the form of NEFT, RTGS and IMPS. In India, with the advent of varied payment systems and settlement tools, the task of transferring funds from one account to another has become faster and more convenient. A huge number of banks, finance companies, government bodies and private organizations are adopting different payment methods in the forms of NEFT, RTGS and IMPS. These payment modes have plugged gaps between firms and customers, not to mention other people concerned. The methods of payment offered by these payment options are reliable, convenient and more than anything, transparent and efficient. Before you adopt any of these, you should know the difference between NEFT and RTGS. Knowing how to use IMPS will help you too.
What is NEFT, RTGS and IMPS?
In India, there are a number of ways to transfer funds. Nonetheless, the most common and frequently used methods for sending funds from one place to another is either through NEFT, RTGS or IMPS. You should understand NEFT, RTGS and IMPS meaning to know the differences between these three popular payment modes. Here is what they signify:
- NEFT – This stands for National Electronic Funds Transfer and was introduced by the Reserve Bank of India. The type of payment facilitated is one-to-one. Using this, individuals transfer money, via electronic means, from any branch of a bank to a person’s account in another branch of a bank.
- RTGS – This is the acronym for Real-time Gross Settlement, introduced by the Reserve Bank of India. Money sent from bank branch to bank branch is transferred on a real-time basis, on gross levels.
- IMPS – Immediate Mobile Payment Service was introduced by the National Payment Corporation of India. Unlike NEFT meaning, this transfer mode is permitted throughout the year.
The Difference Between NEFT, RTGS and IMPS
To use these facilities, the account holder has to have basic beneficiary bank account details for fund remittance. These details include the beneficiary’s name and the bank’s IFSC code. Here is the difference between NEFT, RTGS and IMPS, based on specific categories:
- Type of Settlement – Money transferred through NEFT is done at half-hour intervals, while transfers via RTGS and IMPS are done in real-time.
- Minimum Value of Transfer – The minimum amount of funds transferable through NEFT and IMPS is 1.00 INR, while that with RTGS is 2 lakh INR.
- Maximum Value of Transfer – While NEFT and RTGS have no limits at the maximum transfer value, IMPS has a maximum limit of 2 lakh INR.
- Timing of Service – NEFT and RTGS don’t operate on bank holidays, whereas IMPS operates every day of the year. All three types of transactions can be done 24 x 7 on days of operation.
- Charges for Transactions – With NEFT, there are no charges for inbound transactions (at destination banks of beneficiaries). For RTGS, however, outbound charges apply, and these vary for amount categories. GST charges applicable too, but there aren’t charges for inbound and online transactions. Through IMPS, charges are decided by individual banks/finance organizations with taxes included.
- Options of Payment – While NEFT and RTGS are available for online and offline transactions, IMPS is only available through online transactions.
A Better Idea of Fund Transfer
Depending on the mode of payment you select, fund transfer is easy through any of the three methods above. Moreover, all these ensure security and transparency. You can learn more at Finserv MARKETS.