neft full form neft vs rtgs

Neft Full Form: NEFT vs RTGS Banking & Features 2023

Do you know what is the full form of NEFT? Well, the answer is – National Electronic Funds Transfer.

Do you want to know about NEFT?

In today’s era, there is one thing that we absolutely cannot function without. Yes, you guessed it right!
Net Banking and E-payment

Whether it is grocery shopping or shoe shopping, whether you are at a hotel or a street food shop, the go-to option for all is E-payment.

The era of net banking started in the early 2000s and gained momentum very easily. Though it’s sometimes still unbelievable how can a single click transfer thousands and even lakhs of rupees from our bank account to another? And you don’t even have to worry about the different bank branches but just your account numbers!

But have you ever wondered what is the technology and work behind such a humongous leap in our banking?
Well to answer that question of yours, it is just not one system but systems working together under the RBI(Reserve Bank Of India) to provide us with our go-to option.

neft full form neft vs rtgs

One If that system is NEFT

Now, what is NEFT? NEFT is National Electronic Funds Transfer. It was bought into action by the RBI (Reserve Bank of India) in 2006 to make the fund transactions more user-friendly.

We all have heard or seen the term ‘NEFT’ somewhere or else. But have you ever wondered what is NEFT?

Well, NEFT is a system of transferring money through electronic devices in our digital world or through visiting our nearby bank branch.
Therefore, only the banks included in the NEFT system by RBI can make these transfers.

NEFT works on a Deferred Net Settlement (DNS) basis. It used to work in batches which means that if any transaction is done after its batch timing, then the transaction had to wait for the next batch to begin.
Previously, transactions could be made only from Monday to Friday that too on specific timings and with the exclusion of bank holidays.

But now, gone are the days where users had to do the transaction looking at their watches and calendars.
As RBI has announced that it will work 24×7 to provide services to the customers.

NEFT will now have half-hourly batches. But a user may not be able to transfer money at or after 11:30 pm due to the closing of its last batch. However, users will be able to make the transaction at 12:30 am, in the first batch.

Previously, NEFT had transaction charges for transfers made by visiting the bank branches and it was free of cost for online transferring.

But still many banks like HDFC and ICICI didn’t deduct money for offline transactions.

But now RBI has announced that NEFT would be free even for offline transactions to promote transactions through banks in India.

Table Of Content

Features of NEFT

  1. Mode of transactions through NEFT:
    1. Pocket apps
    2. Branches of banks under the NEFT scheme
    3. Mobile banking(online banking)
  2. Unlike other systems, NEFT doesn’t have a minimum amount limit, that is why a user can send any amount through NEFT from anywhere to everywhere. 
  3. NEFT is a completely safe and secure way to transfer your money, as it is regulated by the RBI.
  4. It is more reliable for small transactions as it is much faster than any other system.
  5. Don’t have a bank account? NEFT got you covered. Even the people not having a bank account can approach any branch of a bank under the NEFT scheme and get the transaction done through another person’s NEFT bank account.
  6. The transactions are credited within 2 business working hours from the request.

Details Required For NEFT Transactions

  1. The amount that needs to be transferred.
  2. Remitter’s (the one who is transferring money) account details.
  3. Name of the person to whom the amount is to be credited.
  4. The account number of the person money is to be credited.
  5. Account type of the beneficiary
  6. Branch name of the credit account (beneficiary).
  7. IFSC code of the credit account (beneficiary).

Sometimes, it so happens that the amount transacted through NEFT is not received even after 2 hours. In such a case check the beneficiary’s account number and if the account is frozen. 

Even if you don’t find a problem at your end then contact your bank branch.

RTGS

The other system for banking and transaction of funds in India by the RBI(Reserve Bank of India) is RTGS.
RTGS stands for Real-Time Gross Settlement.
RTGS is a real-time payment system which means that it is carried out almost instantaneously. Also, the instructions for the transactions are carried out individually.

In contrast to other systems, RTGS is largely used for big transactions. It has a minimum amount limit of 2 lakhs. While the maximum amount limit differs from bank to bank.

Like NEFT, even RTGS had specific timings and was not available on weekends and public holidays. 
But now, even RTGS has no boundaries and funds can be transferred at any day at any time, and from anywhere. 
RTGS has no charges for its transactions whether offline or online.

Details Required For RTGS Transactions

  1. Remitter’s account details(the one who is transferring money).
  2. Name of the person to whom the amount is to be credited(beneficiary).
  3. Account number of the beneficiary.
  4. Account type of the beneficiary.
  5. Branch name of the credit account (beneficiary).
  6. IFSC code of the credit account (beneficiary).

NEFT V/S RTGS Banking: 6 Differences

The basic difference between NEFT banking and RTGS banking is their speed and the way they transfer money.

Here is the list of 6 differences between NEFT and RTGS

1. NEFT transfers money in batches. 
But RTGS transfers money on a real-time basis, that is the money is transferred to the beneficiary’s account at the same time when the request is made.

2. NEFT transfers money in a maximum of 2 hours. 
While RTGS transfers money in 30 minutes.

3. NEFT transaction carries instructions in batches. 
While the RTGS transaction carries instructions individually.

4. NEFT has no minimum amount limit. But RTGS has a minimum amount limit of 2 lakhs.

5. NEFT’s maximum amount limit differs from bank to bank. Even RTGS maximum amount limit differs from bank to bank.

6. NEFT is better suited for small transactions. 
RTGS is better suited for big transactions.

Since both are handled by the RBI, both of them are one of the safest and secure methods for fund transactions.

FAQ’s About NEFT And RTGS

We learned about NEFT full form above. Not only that, we also saw how NEFT is different from RTGS. Now we will have some questions related to the topic.

Can I do online banking through RTGS?

Yes, you can do online payments through online banking.

Can I do online payment through NEFT?

Yes, you can do online payment through NEFT.

Which is more secure, NEFT or RTGS?

Both of them are systems conducted by RBI, therefore both of them are safe.

I want to transfer Rs.25,000. Which system should I use?

You can use both of them. But NEFT would be better for small transactions.

Can I do the transactions by NEFT on public holidays?

Yes, according to the new rules by RBI you can do the fund transfer by NEFT even on public holidays.

What should I do if my money is not received even after 30 minutes of request through RTGS?

Please visit your nearby bank branch.

Can I do a fund transfer from India to Kuwait through NEFT?

Yes, you can do fund transfers through NEFT to foreign countries.

What is the maximum amount limit for NEFT?

The maximum amount limit for NEFT differs from bank to bank.

What is the minimum amount limit for RTGS?

The minimum amount limit for RTGS is 2 lakhs per day.

Final Words And Suggestion

Please do not share your or anyone else’s account number or IFSC code with anyone.
If you receive any phone calls from banks demanding your account number, or OTP then please refrain from giving your account number, OTP, or IFSC code, and please report these phone numbers to the police immediately.

Net banking, online payment, and transactions have made our lives easier but it has also proven us prone to more frauds and thefts happening right under our noses.

Read more about NEFT at RBI’s official website.

Using technology is essential but being careful while using it is more important.

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