RTGS vs NEFT: Full form, Timings, Difference, Limits

RTGS vs NEFT

The US Fedwire system that run the electronic transaction in America is a pioneer of Electronic Fund Transfer technology. RTGS, NEFT, IMPS are types of electronic fund transfer methods. In India, electronic fund transfer was started in 1985. But today, every bank in India use electronic fund transfer methods.

Before the invention of the electronic fund transfer system, Banks use the telegraph system for money transfer. Each country has its unique banking transaction system. RTGS and NEFT transactions are famous in India as payment methods. Each bank has different rules and regulations for RTGS and NEFT transaction procedures.

What is RTGS?

The full form of RTGS is Real-time gross settlement. In the RTGS system the fund is settled on real-time basis and Also It is a continuous system.  In simple word we can say that it is a system which runs continues real-time fund transfer.

When you use the RTGS system for fund transfer, then once you give the instruction of RTGS, the fund transfer happen at real-time basis. There will be minimal delay in the process of completing the RTGS transactions. There will be no batch of instruction.

As per RBI mandate fund transfer value more than Rs 200000/- only proceed with RTGS money transfer system. Only large value transaction are done with RTGS process. In most of Indian Private and Public sector bank, there is no charge for inward real-time gross settlement. The RBI has set floor prices for the RTGS transaction charge. remember the payments are final and irrevocable because it is done on behalf of RBI.

What is Benefits of RTGS?

The RTGS is preferred by many customers because it is a reliable system and offer unique benefits. The Benefits are below listed.

  • RTGS is a safe and secure system: Hence customers can use the RTGS system without any fear of loss.
  • No amount Capping: There is no cap for the transaction amount. Based on your transaction amount the fee will be charged. Minimum amount for RTGS is 2 lakh Rs.
  • Functionality: The RTGS system is available for customer even in their mobile, Net Banking. You can use it during normal Banking hours.

RTGS

  • Real-Time Settlement: The transfer amount will be transferred to a beneficiary on real-time basis.
  • No need of Cheque/Demand Draft: Even if you don’t have a cheque or demand draft against RTGS, the transaction can happen.
  • Paperless: If you use online banking then it will become paperless process.
  • Protection against Frauds: By using RTGS system you get protection against frauds.
  • Floor pricing for RTGS charges: The RBI has fixed charge for RTGS payment.
  • All transaction done via RTGS has legal assistance.

What is NEFT?

NEFT stands for National Electronic Funds Transfer. It is only used for transactions in India. The NEFT payment system was launched in November 2005. Before the NEFT payment system, Banks were using the Special Electronic Funds Transfer system. RBI issued notice to use below Rs 200000 transaction should be done with the NEFT process.

NEFT transactions are done in Batch means there is no real-time settlement process in Fund transfer. It means Fund transfer done in batches. This means it takes more time for the fund transfer settlement process. The charges for NEFT are low.

Nowadays in India, Most banks don’t charge for Inward NEFT transactions. All transfers will be held up until a specific time, then the transactions are done.

What information is required for RTGS and NEFT Transaction?

Customers use RTGS, NEFT for their fund transfer requirement. The RTGS and NEFT transaction can’t proceed if certain information regarding RTGS and NEFT transactions unavailable. The customer needs to fulfill the below information to complete RTGS and NEFT.

  • Amount: Customer need to write the exact amount, which should be debited from the Saving/Current account.
  • Account Number: In some situation customer has two or more accounts in one bank. In this situation you need to select your account from which fund will be debited. If you have only one account then this option will be automatically selected.
  • Fund Receivers bank and Branch details: You need to fill information regarding the receiver’s bank and branch. You need to write or select receiver’s Bank and Branch Name.
  • IFSC Code: You need to write the IFSC code of Fund Receiver’s Branch.
  • Receiver’s Name: You need to write the Receiver’s name so that there should be no mistakes in the RTGS/NEFT Transaction.
  • Account Number of Receiver’s account: You need to write the account number of Receiver in which amount will be credited.
  • Optional Information:
    • Sender Details: You can enter your name, contact details in form. It will benefit if there is any mistake in information. In some reputed banks, the bank representative will call you if there is any mistake or transaction was canceled.
    • Reason of Transaction: It is optional but if the amount is big then you should write reason for transaction.

What is the difference between RTGS and NEFT?

The RTGS and NEFT transactions are different from each other.

  • Difference 1: RTGS done at real-time basis. While NEFT is done in batches.
  • Difference 2: RTGS is used for transactions worth more than Rs 200000. While NEFT is used transactions for any amount.
  • Difference 3: RTGS is based on gross settlement while NEFT is based on Net settlement.
  • Difference 4: RTGS is preferred for large amount transactions. NEFT is preferred for small amount transactions.
  • Difference 5: The minimum amount of money transfer limit in RTGS is Rs 2 lakh, there is no limit for NEFT transaction limit.

RTGS vs NEFT

What are the Benefits of NEFT?

NEFT is preferred by many customers because it is a reliable system and offers unique benefits. The Benefits are below listed.

  • NEFT is a safe and secure system: Hence customers can use the NEFT system without any fear of loss.
  • No amount Capping: There is no cap for the transaction amount. Based on your transaction amount the fee will be charged
  • Functionality: The NEFT system is available for customers even in their mobile, Net Banking. You can use it during 24 hours.

NEFT

  • No need of Cheque/Demand Draft: Even if you don’t have a cheque or demand draft against NEFT, the transaction can happen.
  • Paperless: If you use online banking then it will become a paperless process.
  • Protection against Frauds: By using the NEFT system you get protection against frauds.
  • Floor pricing for NEFT charges: The RBI has a fixed charge for NEFT payment.
  • All transaction done via NEFT has legal assistance.

What are RTGS and NEFT transaction Limits?

RTGS and NEFT have different transaction limits. which are shown in the below table.

Note: These limits are applicable to both Retail and Corporate customers.

Limit NEFT RTGS
Minimum Limit No Limit Rs 200000
Maximum Limit No Limit No Limit

RTGS and NEFT transaction time schedule

RTGS and NEFT transactions are done in time schedule. While most banks are working for 24-hour NEFT transactions. Only some reputed banks in India offer 24-hour NEFT system.  These times are for Transactions done at branch.

Time Start Time End Time
Monday to Tuesday RTGS 9:00 AM 4:30 PM
Saturday RTGS 9:00 AM 4:30 PM
Sunday and Public holiday RTGS N.A. N.A
Monday to Tuesday NEFT 9:00 AM 7:00 PM
Saturday NEFT 9:00 AM 7:00 PM
Sunday and Public holiday NEFT N.A. N.A

What are the charges for RTGS and NEFT?

RBI has issued the notification regarding charges for RTGS and NEFT. Banks can charge different amount for RTGS and NEFT. But most banks in India charges as per the guideline of RBI.

Charges as per RBI guideline

Transaction/Type NEFT RTGS
Inward Transaction Free Free
Up to Rs 10000 Rs 2.5 NA
Rs 10001 to Rs 100000 Rs 5 NA
Rs 100001 to Rs 20000 Rs 15 NA
Rs 200000 Rs 25 Rs 25
Rs 2 Lakh to Rs 5 Lakh RS 25-35
More than Rs 5 Lakh Rs 45-55

Banking transaction channel for RTGS and NEFT?

RTGS and NEFT transactions are done with net banking, mobile banking application, Bank’s branch.

  • RTGS and NEFT at Branch: Each bank has its own RTGS and NEFT form for doing RTGS/NEFT transactions. You can download these RTGS from the Insuregrams website OR bank’s official website or can get it from branch. fill the form and complete your transactions.
  • RTGS and NEFT via Net Banking: The fund transfer request can be done via net banking. Log in to your net banking account and go for fund transfer. You can transfer funds in 3 methods, RTGS, NEFT, IMPS are types available in Net Banking transactions.
  • RTGS and NEFT via Mobile application: Log in to your mobile application and Transfer money via mobile application.

How to do online RTGS and NEFT?

You need to add beneficiary for RTGS/NEFT transactions. first you need to login in to your net banking account. Then go for fund transfer.

  • Now add beneficiary
  • Fill details of receiver’s details
  • Enter receiver’s IFSC code
  • Enter name of beneficiary
  • After process of add beneficiary complete, go for fund transfer option
  • Remember, there will be a cooling period for add beneficiary process for your security
  • Go to fund transfer
  • Select beneficiary, amount and complete transaction

What is the Definition of RTGS?

According to RBI, Definition of RTGS is

he acronym ‘RTGS’ stands for Real Time Gross Settlement, which can be explained as a system where there is continuous and real-time settlement of fund-transfers, individually on a transaction by transaction basis (without netting). ‘Real Time’ means the processing of instructions at the time they are received; ‘Gross Settlement’ means that the settlement of funds transfer instructions occurs individually.

How would one know the IFSC code of the receiving branch?

  • ISFC number can be searched with serval websites
  • Also, cheque book also mention IFSC code
  • Also, the front page of Bank passbook contains IFSC code
  • The list of IFSCs is also available on the RBI website (http://rbidocs.rbi.org.in/rdocs/RTGS/DOCs/RTGEB0112.xls).
  • You can ask the beneficiary to provide IFSC code for RTGS/NEFT transaction

Whom to contact if there is a problem in RTGS?

As per reserve bank of India, for support RBI has given address. You can write letter to them.

Write a letter to

The Chief General Manager
Reserve Bank of India
Customer Service Department
1st Floor, Amar Building, Fort
Mumbai – 400 001

How the NEFT transaction done?

The NEFT transactions are done at 30 minutes batches. According to RBI, There will be 48 half-hourly batches every day. Also, The settlement of the first batch will commence after 00:30 hours and the last batch will end at 00:00 hours.

The NEFT system will be available on all days of the year, including holidays as per notification of RBI.

What is the objective of NEFT system?

The objective of the NEFT System is to establish an electronic funds transfer system to facilitate an efficient, secure, economical, reliable and expeditious system of funds transfer and clearing in the banking sector throughout India, and to relieve the stress on the existing paper-based funds transfer and clearing system.

What information taken for NEFT?

For NEFT, the NEFT form is given to customers. The form includes below things.

  • Beneficiary’s Name :
  • Beneficiary’s Branch Name :
  • Beneficiary’s Bank Name :
  • Beneficiary’s Account Type :
  • Beneficiary’s Account No. :
  • Beneficiary’s Branch IFSC :

How to get RTGS and NEFT form in PDF?

You can download the form in PDF from the below links.

CUB Bank RTGS NEFT form Click here
DCB Bank RTGS NEFT form Click here
Bandhan Bank RTGS NEFT form Click here
United Bank of India RTGS NEFT form Click here
Corporation Bank RTGS NEFT Form Click here
Uco Bank RTGS Form NEFT Form Click here
Vijaya Bank RTGS form NEFT Form Click here
Federal Bank RTGS Form NEFT Form Click here
Central Bank of India RTGS form NEFT Form Click here
Indusind Bank RTGS NEFT Form Click here
Indian Overseas Bank RTGS Form NEFT Form Click here
Karur Vysya Bank KVB RTGS NEFT Form Click here
Karnataka Bank RTGS NEFT Form Click here
Allahabad Bank RTGS and NEFT Form Click here
PNB Punjab National Bank RTGS and NEFT Form Click here
Yes Bank RTGS and NEFT Form Click here
Canara Bank RTGS and NEFT Form Click here
Andhra Bank RTGS NEFT Form Click here
RBL Bank RTGS NEFT Form Click here
TMB Bank RTGS NEFT Form PDF Click here

Que 1: What is the definition of beneficiary?

Ans 1: Beneficiary means the person designated as such, and to whose account payment is directed to be made in a payment instruction.

Que 2: What is the definition of beneficiary branch?

Ans 2:  “Beneficiary / Destination Bank / Branch” means the branch of the bank/branch identified in a payment instruction which is maintaining the account of the beneficiary.

Que 3: What is the definition of the NEFT Clearing center?

NEFT Clearing Centre means any office designated by the Nodal Department for receiving, processing and sending the NEFT SFMS message and the debiting and crediting of accounts of the participating banks and institutions for the settlement of payment obligations or one or more of these functions. The National Clearing Cell, Reserve Bank of India, Nariman Point, Mumbai has been designated as the NEFT Clearing Centre (NCC) for purposes of the NEFT System.