NEFT and RTGS Transfer Charges Difference and Meaning

http://www.jagoinvestor.com/2012/09/neft-and-rtgs-transfer-charges.html

Home Old-Articles Services Forum Products

Welcome, Guest Sign In | Register

59

NEFT and RTGS A detailed Guide

by Manish Chauhan 177 comments Lets try to understand what is NEFT and RTGS and what is the difference between them. NEFT and RTGS are two main mechanisms to transfer money from one bank to another bank in India. Transferring money between two accounts in same bank is pretty straight forword and its a internal matter of the bank, it does not have to deal with other banks and their protocols, however when one bank wants to send the money to another bank in India, there is a defined mechanism it has to be done and hence NEFT and RTGS comes into picture. Both these systems are maintained by Reserve Bank of India. Lets understand both of these

NEFT National Electronic Fund Transfer

NEFT full form is National Electronic Fund Transfer, and its a system of transfer between two banks on net settlement basis. Which means that each individual transfer from one account to another account is not settled or processed at that same moment, its done in batches . A lot of transactions are settled in one go in each batches. Presently, NEFT services are available from 8:00 am to 6:30 pm on weekdays (Mon Fri) and from 8:00 am 12:30 pm on Saturday. Any NEFT Transfer done between 8 am 5 pm generally gets settled on the same day, but if you deposit the money after 5 pm, then that will be settled the next working day. In case of Saturday, any money deposited between 8 am 12 noon can be expected to reach the beneficiary account the same day.

1 of 35

02/12/2013 9:09 AM

NEFT and RTGS Transfer Charges Difference and Meaning

http://www.jagoinvestor.com/2012/09/neft-and-rtgs-transfer-charges.html

NEFT Transfer Example For example lets say Ajay has ICICI Bank account and Robert has a bank account in HDFC bank , Now Ajay deposits Rs 10,000 in Vijay account through NEFT transfer at 10:30 am . The money will be then taken out from Ajays ICICI Account and will be sent to Vijays HDFC bank the same day, then HDFC bank will credit Vijays bank account. In case money can not be transferred to the target account (beneficiary account) , the money will be credited back to the source branch within 2 hours of the batch in which it was processed.

RTGS Real Time Gross Settlement

RTGS full form is Real Time Gross Settlement and its a system of money transfer between two banks in real time basis, which means the moment one bank account transfer the money to another bank account, its settled at that time itself on real time basis between the banks, but the beneficiary bank has to make the final settlement to the bank account within two hours of getting the money. RTGS is the fastest possible money transfer between two banks in India through a secure channel. Let me give an example, lets say Ajay has a SBI Bank account and Vijay has an Axis Bank account, Ajay transfers Rs 5 lacs to Vijays account through RTGS transfer, SBI bank instantly transfers Rs 5 lac to Axis Bank, now Axis bank has 2 more hours to deposit it in Vijays account . Hence in worst case even with RTGS transfer there can be delay of 2 hours. 59

NEFT and RTGS Charges

NEFT and RTGS transfer charges depends on the Bank. RBI has guidelines for the maximum fees which can be charged, but it finally depends on the bank in question. Note that NEFT and RTGS charges, varies depending on the amount transferred and the timings when its done. While NEFT charges depends purely on the amount transfered, RTGS charges depends on the amount transferred as well as the timings of the day when its done . A RTGS transfer early will cost a little less charges. Note that, Service tax is also applicable to the charges. Below are the charges shows for NEFT and RTGS for retail banking (not for institutional banking)

2 of 35

02/12/2013 9:09 AM

NEFT and RTGS Transfer Charges Difference and Meaning

http://www.jagoinvestor.com/2012/09/neft-and-rtgs-transfer-charges.html

59 Information required to make an RTGS & NEFT payment? For making a payment through NEFT/RTGS, following information has to be furnished. Amount to be remitted Remitting customers account number which is to be debited. Name of the beneficiary bank. Name of the beneficiary. Account number of the beneficiary. IFSC code of the destination bank branch Note : MICR code is generally not required for NEFT or RTGS transfer Points to Note Each Bank has their own NEFT and RTGS application form, which you can download from their website RBI declared holidays each year when you cant do NEFT and RTGS fund transfer transactions, see 2012 list To find out different bank branches which are enabled for NEFT and RTGS transactions, you can see this RBI list

Difference Between NEFT and RTGS

Finally let me list down all the differences between NEFT and RTGS in a table, so its easy for you to understand the conclude finally.
Criteria NEFT RTGS (Retail)

3 of 35

02/12/2013 9:09 AM

NEFT and RTGS Transfer Charges Difference and Meaning

http://www.jagoinvestor.com/2012/09/neft-and-rtgs-transfer-charges.html

Settlement Full Form Timings on Mon Fri Timings on Saturday Minimum amount of money transfer limit Maximum amount of money transfer limit When does the Credit Happen in beneficiary account Maximum Charges as per

Done in batches (Slower) National Electronic Fund Transfer 8:00 am 6:30 pm 8:00 am 12:30 pm No Minimum No Limit Happens in the hourly batch Between Banks Upto 10,000 Rs 2.5 from 10,001 1 lac Rs 5 from 1 2 lacs Rs 15 Above 2 lacs Rs 25 Small Money Transfer

Real time (Faster) Real Time Gross Settlement 9:00 am 4:30 pm 9:00 am 1:30 pm 2 lacs No Limit

Real time between Banks Rs 25-30 (Upto 2 5 lacs) Rs 50-55 (Above 5 lacs) (Lower charges for first half of day) Large Money Transfer

59 Suitable for

Are you now clear about the difference between NEFT and RTGS and their transfer charges?

Tagged as: Most Commented Articles

Subscribe via RSS or Email:

4 of 35

02/12/2013 9:09 AM

NEFT and RTGS Transfer Charges Difference and Meaning

http://www.jagoinvestor.com/2012/09/neft-and-rtgs-transfer-charges.html

What do you want to read about

Mutual Funds Life Insurance BankingHealth Insurance Credit Report and ScoreMost Commented ArticleReal Life Experiences Share MarketLoans Real Estate Income TaxCredit Cards For Begineer Investors Succession Laws EPF ULIP Product ReviewsBest of Jagoinvestor Other Products & Concepts How-TO GuidesBooks, Launches, Initiatives Investors Myths Psychology & Wisdom PPF General

59

5 of 35

02/12/2013 9:09 AM

NEFT and RTGS Transfer Charges Difference and Meaning

http://www.jagoinvestor.com/2012/09/neft-and-rtgs-transfer-charges.html

48 comments Uma Singh CVS, Delhi University nyc :) n thanks Reply 1 Like November 12 at 9:36am

Add a comment

Ratnakar Madari Executive Director at Alumeco India Extrusion Limited Excellent & detailed information is given. Thank you very much. M. Ratnakar MBA, B.E. Nov 14, 2013. Reply Like November 14 at 7:52am Manish Chauhan Author and Founder at Jagoinvestor 992 subscribers Welcome Reply Like November 24 at 11:48pm Ravichandra Reddy Osmania University good information. Thanks for the information. Reply 2 Like November 16, 2012 at 10:53am T op Commenter Seventhday Adventist School

Zoher Doctorr Nice Informative

59

Reply

1 Like November 23, 2012 at 6:16am

rajeshsanr (signed in using yahoo) nice thanks for information. Reply Like November 9, 2012 at 3:29am Harish Naganna Founder and Director at Aditya Investments- Pune Thanks Pankaj , I just came to know about IMPS and also thanks Manish for sharing this.Gr8. Reply 1 Like September 6, 2012 at 9:20am

Saroj Mazumder Assistant T eacher of Physics at Govt. of West Bengal nice one. Thanks. Reply 1 Like September 3, 2012 at 9:06pm

Bodi Kamal Senior Assistant at District Medical and Health office, Nellore, Andhra Pradesh Thanks Reply 1 Like September 3, 2012 at 9:41am

Pankaj Batra Founder at SocialFinance 293 subscribers I believe IMPS is the fastest possible money transfer between two banks in India through a secure channel and not RTGS. It even works 24x7. Reply Like September 3, 2012 at 7:17pm Manish Chauhan Author and Founder at Jagoinvestor 992 subscribers Yes Pankaj , I read about it now . I can see IMPS is fairly new thing . Will do a seperate post on it now Reply Like September 4, 2012 at 9:20pm Chethan S Karkala Intergraph I too vote for a post on IMPS. Since recently online payments can also be made through IMPS. BSNL Portal (http://portal.bsnl.in) is one site where I use IMPS facility to pay bills and recharge prepaid mobile connections.

6 of 35

02/12/2013 9:09 AM

NEFT and RTGS Transfer Charges Difference and Meaning

http://www.jagoinvestor.com/2012/09/neft-and-rtgs-transfer-charges.html

{ 177 comments read them below or add one } 1 Jassi September 3, 2012 at 9:58 am Thanks Manish. I wasnt aware about RTGS till now Rgds, Jassi Reply 2 Pushpender September 3, 2012 at 10:10 am RBI website mentions lower limit of RTGS 2 lakh and maximum limit not bound. Reply 3 Manish Chauhan September 5, 2012 at 9:35 pm Corrected already Reply 59 4 Rakesh September 3, 2012 at 10:23 am Manish, Much appreciated, good stuff. Did not know about RTGS. In the survey above Why do you want to quit your job ? You could add an option for Satisfied with current Job / Not looking for change Reply 5 Manish Chauhan September 5, 2012 at 9:34 pm The survey is only for those who want to quit Reply 6 Vasanth September 3, 2012 at 10:24 am Manish, Useful article!! You have betrayed Robert in your NEFT transfer example Also recently im hearing a new way of transferring money which is called IMPS (interbank Mobile Payment System). If you can provide details about that as well it would be great !! Heard it is instant money transfer method. Thank in advance Regards, Vasanth Reply

7 of 35

02/12/2013 9:09 AM

NEFT and RTGS Transfer Charges Difference and Meaning

http://www.jagoinvestor.com/2012/09/neft-and-rtgs-transfer-charges.html

7 Anand September 3, 2012 at 5:50 pm Is MMID related to this? Manish, this post would be incomplete without IMPS. Please include that too. Reply 8 Vasanth September 3, 2012 at 6:12 pm Yes Anand!! MMID is related to IMPS only.. Reply 9 Arun Rathi September 4, 2012 at 12:50 pm Agreed!! Lots of ppl dont know about IMPS which is really a good thing (may not be good for ppl who frequently keep changing their mobile numbers Reply Manish Chauhan September 5, 2012 at 9:02 pm 59 Yes MMID is related to IMPS . Will do a seperate post on this very soon Reply 11 Manish Chauhan September 5, 2012 at 9:32 pm Will update an article on IMPS very soon ! Reply 12 rajiv Singh September 3, 2012 at 10:25 am Hi Manish, In section Difference Between NEFT and RTGS The RTGS column shows the min and max amount of money transfer possible as 5lacs, But in maximum charges as per RBI row the amount is mentioned as 2lacs to above 5 lacs. Which is correct ? ? Reply 13 Manish Chauhan September 5, 2012 at 9:31 pm No that was wrong , I have updated with right information now Reply 14 Prabhat September 3, 2012 at 10:47 am Good Article on Transactions. Reply

8 of 35

02/12/2013 9:09 AM