What is the RTGS, NEFT ? Difference Between NEFT, RTGS and IMPS

What is RTGS ?

The acronym 'RTGS' stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds individually on an order by order basis (without netting). 'Real Time' means the processing of instructions at the time they are received rather than at some later time.'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis). Considering that the funds settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable.

WHAT IS NEFT.?
National Electronic Funds Transfer is an electronic funds transfer system maintained by the Reserve Bank of India. Started in November 2005, the setup was established and maintained by Institute for Development and Research in Banking Technology.

                              


What is the different RTGS,NEFT, IMPS.?
Different payment and settlement systems in India have made the task of transferring money from one bank account to another easier and faster. Now account holders don’t have to wait for days to receive money in their bank accounts. With the help of the latest digital payment systems, money can be sent and received in an instant anytime from anywhere. A large number of banks, private companies and government bodies along with others are adopting different payment and settlement methods. This has helped in reducing the gap between the entities and their customers and other concerned people. These methods are fast, convenient and useful for documentation purposes. They also are superior in terms of reliability and cost involved.

What are the different ways to transfer funds online in India?

India currently has various methods to transfer money online such as digital wallets, UPI, and more. However, the most commonly used online fund transfer method has been:
  • National Electronic Funds Transfer (NEFT)
  • Real Time Gross Settlement (RTGS)
  • Immediate Mobile Payment Service (IMPS)
While NEFT and RTGS was introduced by RBI (Reserve Bank of India), IMPS was introduced by National Payments Corporation of India (NPCI). Read further to learn more about these three payment systems.
*NEFT
National Electronic Funds Transfer (NEFT) is a payment system that facilitates one-to-one funds transfer. Using NEFT, people can electronically transfer money from any bank branch to a person holding an account with any other bank branch, which is participating in the payment system. Fund transfers through the NEFT system do not occur in real-time basis and the fund transfer settles in 23 half-hourly batches.
*RTGS
Real Time Gross Settlement (RTGS) is another payment system in which the money is credited in the beneficiary’s account in real time and on gross basis. The RTGS system is primarily meant for large value transactions that require and receive immediate clearing.
*IMPS
Immediate Mobile Payment Services(IMPS) is a real time instant inter-bank funds transfer system managed by National payment corporation of India. IMPS is available 24/7 throughout the year including bank holidays unlike NEFT and RTGS.
NEFT, RTGS and IMPS payment systems were introduced to offer convenience and flexibility to the account holders. To use these online fund transfer services, remitter must have the basic bank account details of the beneficiary. The bank account details include the beneficiary’s name and bank’s IFSC. Though all the three payment systems are used for funds transfer, they exhibit a few differences.
Before learning their differences, let’s first learn some basic terms revolving around payment systems. These terms will help in understanding the difference among different payment systems better.
Fund Transfer Limit
The maximum and minimum amount of money allowed for transfer by each payment system may differ. Therefore, fund transfer value is an important factor in determining which fund transfer method will be appropriate for a customer.
* Service Availability
Some payment systems are available for 24*7 while others have specific timings. Payment systems that are available 24*7 allow remitters to initiate money transfer anytime and any day. However, the funds will settle only when the service is available.
* Fund Settlement Speed
Different fund payment systems have different fund settlement speed. Fund settlement speed here is the total time consumed to settle money from one account to another after the transfer has been initiated.
* Fund Transfer Charges
Transferring money involves charges. As per RBI, fund transfer charges for each payment system are decided by banks. The amount charged is based on the amount to be transferred, transfer speed and other features offered by the bank.
Although there are various other important terms, these are the few basics that will help you understand the difference between NEFT, RTGS and IMPS.
* What is the minimum/maximum amount for RTGS/NEFT transactions under Retail Internet Banking?
Minimum / Maximum amount for RTGS / NEFT transactions under Retail Internet Banking
TypeMinimumMaximum
RTGSRs. 2 LakhsRs. 10 Lakhs
NEFTNo MinimumRs. 10 Lakhs



*. What is the minimum/maximum amount for RTGS/NEFT transactions under Corporate Internet Banking?
Minimum / Maximum amount for RTGS / NEFT transactions under Corporate Internet Banking
TypeMinimumMaximum
(per transaction)
Maximum
(per day)
RTGSRs.2 LakhsSaral - Rs.10 Lakhs
Vyapaar - Rs.50 Lakhs
Vistaar - Rs.2000 Crores
Saral - Rs.10 Lakhs
Vyapaar - No Limit
Vistaar - No Limit
NEFTNo MinimumSaral - Rs.10 Lakhs
Vyapaar - Rs.50 Lakhs
Vistaar - Rs.2000 Crores
Saral - Rs.10 Lakhs
Vyapaar - No Limit
Vistaar - No Limit

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