12/14/22, 5:02 PM NEFT vs RTGS: What’s the Difference?

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NEFT

NEFT vs RTGS: What’s the

Difference?
Last Updated: August 19, 2022

With the introduction of online modes of payment, and increased

technical usage among the users, transferring funds from one
bank account to another has become almost like a piece of cake.
Users can choose any one of the various modes of payment
depending upon the amount to be transferred, the time duration
in which it should be credited to the receiver’s bank account, etc.

NEFT and RTGS are two of the many methods of fund transfer
available to the users. Both these methods have their own
advantages and disadvantages and are suitable for all users,
depending upon their requirements.

This blog focuses on the differences between NEFT vs RTGS as

modes of fund transfer and explains which one you should
choose and why!

Understanding NEFT- National Electronics Funds

Transfer

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Regulated by the Reserve Bank of India, NEFT or National

Electronic Funds Transfer is an electronic method of transferring
money online. Most Indian banks provide the NEFT feature on
internet banking and mobile banking. Money transfer made
through NEFT does not require any additional transaction costs.
Transactions made through NEFT are processed in separate
batches. The RBI has specified a cut-off within which these
transactions are settled.

NEFT is a one-to-one payment facility

NEFT transactions can be processed only between the banks

that offer NEFT-enabled services

Transactions made through NEFT do not take place in real-

time; implying that it takes a few days for NEFT transactions
to complete

Before December 2019, RBI had fixed timings during which

NEFT transactions can be processed. Any NEFT transaction
will be processed only between 8:00 AM and 6:30 PM from
Monday to Friday, and 8:00 AM to 12:00 PM on Saturdays.
However, from 2020, NEFT transactions can be performed
24*7

To transfer funds through NEFT, you must add beneficiaries

on the internet banking portal of your required bank

There are no limits on the amount of NEFT transactions

There is a fee applicable on all NEFT transactions; the amount

varies from Rs. 2.5 to Rs. 25, depending on the amount being
transferred

As per RBI guidelines, the payments made via NEFT are

processed and settled in batches of half-hour

Understanding RTGS- Real-Time Gross

Settlement

RTGS stands for Real-time Gross Settlement, meaning that

through this method, the money is transferred from one bank
account to the other in real-time, without any delay. RTGS works
out as the best payment method if you need to transfer an
amount equal to or more than Rs. 2 lakh in real time. RTGS does
not follow any specific processing method unlike NEFT; hence,
the funds are settled in real-time, without any delay. Through
RTGS, each transaction gets processed with every instruction,
which makes the money transfer process easier and faster.
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Transactions made through RTGS are processed on a one-to-

one basis

RTGS facility can be accessed at any time, on any day of the

year

The Real Time Gross Settlement method is mostly used for

transactions of high value

The RTGS service can be used using both online and offline
modes

To process transactions through RTGS, the following details

must be provided-

Amount to be transferred

Bank Account number

Beneficiary’s name

Bank’s branch

Beneficiary’s IFSC

Beneficiary’s bank branch

Difference between NEFT vs RTGS

The following are the key differences between NEFT and RTGS-

Point of
NEFT RTGS
Difference

Minimum
Amount to be Re. 1 Rs. 2 Lakh
Transferred

Maximum
Amount to be No limit No limit
Transferred

Amount
Type of
settled in Amount settled one-on-one
Settlement
batches

Settlement Time 2 hours Immediate

Transfer 24*7, all 365

Varies from bank to bank
Timings days

Mode of Both- online

Both- online and offline
Transfer and offline
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Rs. 30 on outward transactions

Additional No charges between Rs. 2 lakh and Rs. 5 lakh;
charges applicable Rs. 55 on outward transactions of
more than Rs. 5 lakh

Charges on Transactions: NEFT vs RTGS

Additional Charges on NEFT Transactions-

NEFT transactions involved the following additional charges as

money transfer fee until December 2019-

Transaction Amount Fee Amount

Less than or equal to Rs. 10,000 Rs. 2.5

Between Rs. 10,000 and Rs. 1 Lakh Rs. 5

Between Rs. 1 Lakh and Rs. 2 Lakh Rs. 15

Equal to or more than Rs. 2 Lakh Rs. 25

However, from January 2021, RBI has removed all the applicable
charges on online NEFT transactions. This initiative was taken to
promote digital transactions. RBI stated that with effect from 1
January 2020, no banks shall levy any charges from their savings
account holders on online fund transfers done through NEFT
(National Electronic Funds Transfer) system.

Additional Charges on RTGS Transactions-

The following charges are applicable on transactions made

through RTGS-

Charges
Type of Transaction
Applicable

Inward transactions No charges

Online transactions (Internet/Mobile Banking) No charges

Outward transactions (amount = Rs. 2 lakh –

Rs. 30
Rs. 5 lakh)

Outward transactions (amount < Rs. 5 lakh) Rs. 55

 NEFT vs RTGS: Which is 

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12/14/22, 5:02 PM NEFT vs RTGS: What’s the Difference? | Paytm Blog

Looking at the above-mentioned differences, it is evident that

NEFT and RTGS are two majorly different modes of fund transfer.
While NEFT has no minimum or maximum limit on the amount to
be transferred, RTGS transactions can only be performed if the
amount to be transferred is equal to or more than Rs. 2 lakh.
Similarly, NEFT transactions take around 2 hours to be
processed, while RTGS transactions are processed immediately.

So, if you are to make a choice between both these payment

options, you can choose any one on the basis of your
requirements explained as below-

You may go for NEFT as the mode of fund transfer if you have
to transfer a small amount and there is no urgency for the
completion of the transaction

Alternatively, if you wish to transfer a huge amount of money

and on an immediate basis, then RTGS should be your
preferred mode of fund transfer

To Conclude:

Irrespective of whichever method you choose, it is important to

note that both these methods are equally safe and secure and
are governed by the Reserve Bank of India. Both, NEFT and RTGS
are reliable payment systems that support the digital, cashless
initiative in building an advanced economy in the country.

FAQs
What are the NEFT timings?

What is the NEFT transfer limit?

Are NEFT transactions chargeable?

What are RTGS timings?

What is the RTGS transfer limit?

Are RTGS transactions chargeable?

Which is the better mode of fund transfer- NEFT of RTGS?

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