Difference between IMPS, NEFT, & RTGS

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There was a time when transferring money into another account meant either issuing a cheque or standing in long queues at the bank to deposit money. With the advent of internet banking in India, there are now several convenient ways of transferring money online. The most well-known and reliable of these are IMPS, NEFT, and RTGS. While money can be transferred from any place at any time using these three mechanisms, they are governed by different rules and regulations and are used for different purposes.

IMPS

Immediate Payment Service or IMPS was introduced in 2010 by the National Payments Corporation of India (NPCI). It enables electronic fund transfer instantly and is one of the simplest and fastest transfer methods available for most account holders. IMPS access is facilitated using multiple channels like IFSC, SMS, ATM, and mobile number.  IMPS timings are 24*7 on all days of the year. ₹2 lakh is the general maximum limit of transaction amount per day and charges are mostly free, but some banks have a higher limit and charges differ according to banks.

RTGS

Real-Time Gross Settlement (RTGS) was introduced by the RBI (Reserve Bank of India) to cater to the needs of businesses and retail account holders. It is an efficient and real-time transfer mechanism that businesses rely on to make transfers of large sums of money. It helps account holders to send and receive a large sum without having to wait for clearance. There is a minimum limit of  ₹2,00,000 to make an RTGS payment.

NEFT

National Electronic Funds Transfer (NEFT) was introduced by the RBI to allow online transfers in batches. People can transfer money from any bank branch to others who hold an account with any other bank branch which is NEFT-enabled. You can initiate an NEFT transfer at any time of the day. The request will be sent to a queue and the transfer will be settled in half-hourly batches.

How are NEFT and RTGS different?

While both NEFT and RTGS are used for online funds transfers the difference between NEFT and RTGS lies in the transaction limits, transaction process, and purpose served by each. NEFT transfers are completed in batches, on a half-hourly basis whereas RTGS transfers are done immediately without having to wait for clearance. RTGS has a minimum limit of ₹2 lakhs for funds transfer whereas no such minimum limit exists for NEFT.

IMPS vs RTGS vs NEFT

Category IMPS NEFT RTGS
Minimum Transfer Limit ₹1 ₹1 ₹2 lakh
Maximum Transfer Limit ₹2 lakh No limit on the amount transferred.   The maximum amount per transaction within India and Nepal is ₹50,000 No limit
Settlement Type Real-Time Half Hourly batches Real-Time
Transaction Charges Depends on Individual banks and PPIs. Taxes included No charges for inward transactions No charges on online and inward transactions.   Outward Transaction ₹2 lakh to ₹5 lakh – ₹25 + GST Above ₹5 lakh – ₹50 + GST
Timings AVAILABLE 24/7*365 days    
Payment Options Online Online and Offline Online and Offline

 To Sum Up

NEFT, RTGS, and IMPS payment transfer systems were introduced to make payments quicker and easier. These transfer mechanisms differ from one another in the purpose they serve and in the manner in which they are processed.

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