Fund Transfer Types – NEFT, RTGS & IMPS

Fund Transfer Types – NEFT, RTGS & IMPS

Most of the banks provide multiple options based on their various factors and customer’s requirements. Currently, banks provide multiple transfer methods such as below 

1.    National Electronic Funds Transfer ( NEFT )

2.    Real Time Gross Settlement ( RTGS )

3.    Immediate Payment Service ( IMPS )

These types are based on below factors 
1. The value of the transaction
2. Speed of transfer 
3. Service availability
And other factors are, each of the transfer methods will provide different kinds of features and flexibility. Though each of them has its own pros and cons.  They provide flexibility and convenience to their customers.

Fund Transfer Methods Types

There are various systems available for online transfer of funds, Just like as digital wallets, UPI, etc, NEFT, RTGS, and IMPS are the most common as well as highly used methods. In order to initiate a fund transfer request, the person who is transferring the money also known as the originator is required to have the basic account details of the beneficiary. Details such as the bank account number, beneficiary’s name on the bank account, IFSC Code, and the bank branch name are the most important and necessary factors to use any transfer method of money transfer. But finally, the originator has to considered responsible for ensuring the correctness of the account details used for a transfer of money.

Before understanding these of the fund transfer methods and knowing the differences between them, it is necessary to learn the basic factors that are involved in each of the payment systems.

These important factors distinguish the online fund transfer methods on various factors -

     Fund Value - The fund value is essential to determining which of the transfer methods are rights for you. Depending on the value of the money, the user needs to choose a particular fund transfer type that will cater to his or her requirements. However, in the case of newly registered beneficiary, a limited amount of fund is allowed to transfer. If you are new to transferring funds online, it will be better to contact your bank or refer to their help desk or instructions 

·     Timings (service availability) - There are various methods of fund transfer that allows 24/7 online transfers while others have their specified timings. The latter allows the user to initiate a fund transfer any time but the funds will settle only during the availability of the service. 

·   Fund Settlement Speed - After considering the fund amount, most often a user will look into the settlement speed parameter. Each of the fund transfer methods comes with different types of settlement speed. Fund settlement speed will indicate the amount of time consumed or the speed at which the funds are settled to the beneficiary's account once the fund has been initiated. Mostly people largely choose one transfer method over that due to the speed factor, however, a faster settlement speed is included to attract additional charges.

·         Charges - In accordance with Reserve Bank of India - RBI, banks always decide their transaction charges for each of the fund transfer methods. The charges will be purely based on the total amount of the fund, settlement speed, and other features/flexibility offered by the bank. The government levies an applicable to the service charge for each fund transfer transaction. Both the originators and the beneficiaries are advised to refer to his or her banks help desk from website to get the latest list of transaction fees and charges applicable for online transfers. 

·  Transaction Limits - It is one of the safest banking features and healthy practices. All banking and financial institutions specify their transaction limits on most types of their banking and financial products. Also, RBI regulates the transaction limits and all other factors of fund transfer by through-out the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS). BPSS- is basically a  subcommittee of the Central Board of the RBI and designated for being the highest authority to making policies pertaining to the payment systems in all India. Moreover, BPSS is also having responsible for supervising all the payment and settlement systems regularly. For your information, All the payment and settlement systems and services in India are regulated under the Payment and Settlement Systems as per Act, 2007 (PSS Act).

There are also various other factors are involved in the transfer of funds, these all are few of the most basic and important factors which differentiate one transfer method from the other. Since now each of the factors has a direct impact on the various transfer methods, it makes it easy to understand the differences between the available transfer option.

Difference between NEFT, RTGS, and IMPS

Parameter	NEFT	RTGS	IMPS
Minimum transfer amount	Rs.1	Rs.2 lakh	Rs.1
Maximum transfer amount	No limit	Rs.10 lakh	Rs.2 lakh
Settlement	Batches	One-on-one settlement	One-on-one settlement
Speed of settlement	2 hours (Respect to cut-off timings and batches)	Immediately	Immediately
Service availability	Weekdays: 12 batches between 8:00 a.m. - 6:30 p.m. Saturday: 6 batches between 8:00 a.m. 1:00 p.m. Sunday and bank holidays: Unavailable	Weekdays: 8:00 a.m. - 4:00 p.m Saturdays: 9:00 a.m. - 4:30 p.m Sunday and bank holidays: Unavailable	All Days 24/7
Fees	Up to Rs.10,000 - Rs.2.50 From Rs.10,000 up to Rs.1 lakh - Rs.5 From Rs.1 lakh up to Rs.2 lakh - Rs.15 From Rs.2 lakh up to Rs.5 lakh - Rs.25 From Rs.5 lakh up to Rs.10 lakh - Rs.50	From Rs.2 lakh to Rs.5 lakh -Rs.25 From Rs.5 lakh to Rs.10 lakh Rs.50	Up to Rs.10,000 - Rs.2.5 From Rs.10,000 to Rs.1 lakh -Rs.5 From Rs.1 lakh to Rs.2 lakh- Rs.15
Online or Offline	Both	Both	Online

Things to consider before initiating a fund transfer

·         Timings - The timings for each type of fund transfer methods depend on to the bank. NEFT and RTGS are commonly based on the bank’s hours of operation, depending on the location and specific working hours, the service availability may differ for either of the party involved in the fund transfer.

·      GST - GST is applicable on the transaction fee as per the latest norms which are subject to charge.

·      Transaction fee - Fees charged for initiating the transfer and also not for receiving the funds.

·  Transfer network - The user needs to check whether the beneficiary's account is eligible to receive funds or not since the bank might not be a part of the transfer network.