RTGS Vs IMPS Vs NEFT – How do they work?

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Online transfer of funds has now well and truly taken roots. Consumers now use more of online transfer than cheques to conduct banking transactions. One of the routes for online transactions– Real Time Gross Settlement (RTGS) – will now work 24×7. Earlier you could make an RTGS transfer only from 7 am to 6 pm on a working day. RTGS handles 6.35 lakh transactions daily for a value of Rs 4.17 lakh crore across 237 participant banks. 

Money 9 takes a look at the three online transfer mechanisms– Real Time Gross Settlement, National Electronic Funds Transfer (NEFT), and Immediate Payment service (IMPS).

Real Time Gross Settlement – RTGS

As the name suggests, the fund transfer happens in real-time i.e immediately. The RTGS system allows for large value transactions. The minimum amount that one can transfer is Rs 2 lakh and up to any limit. There is no upper cap to the amount that you can transfer though banks can have a specific upper limit. Online transfer of funds via RTGS  is free of charge but the RTGS transfer at the bank branch will attract a fee. This charge/fee will vary from bank to bank. For instance, ICICI Bank charges Rs 20 to Rs 45 plus GST and HDFC Bank charges Rs 25 to Rs 50 plus taxes.

Immediate Payment service (IMPS)

IMPS also facilitates the instant transfer of money. It is a good medium to transfer small funds as the minimum limit of IMPS is Re 1. But there is a limit on the upper side and one can’t transfer funds beyond Rs 2 lakh. Transaction charges on IMPS may differ from bank to bank and few banks have made it free as well. SBI and IDFC First bank don’t charge for IMPS transactions but ICICI Bank takes a transaction fee of Rs 5 to Rs 15 plus applicable tax. 

National Electronic Funds Transfer – NEFT

As compared to RTGS and IMPS, NEFT transaction is not a real-time transfer. NEFT transfer takes about half an hour to get credited. The minimum amount that you could transfer via NEFT could be as low as Re 1 and the maximum limit cap could vary from bank to bank. ICICI Bank’s maximum limit is Rs 20 lakh whereas HDFC Bank allows to transfer up to Rs 25 lakh through NEFT. There is no transaction charge on NEFT transfer done through net banking but NEFT transfer at the bank branch will attract some charge. This varies from Rs 2 to Rs 25.