Social ,16 Mar 2025

Difference Between NEFT, RTGS, and IMPS: A Comprehensive Guide

In today's digital era, transferring money between bank accounts has become easier and more efficient. However, with multiple options available, it is essential to understand the differences between NEFT, RTGS, and IMPS to choose the right mode of fund transfer. These three payment systems are widely used in India for electronic fund transfers, but they differ in their speed, settlement mechanism, and applicable charges.

1. National Electronic Funds Transfer (NEFT)

Overview:
NEFT is a payment system that allows individuals and businesses to transfer money electronically between bank accounts in a batch-wise settlement process.

Key Features:
➡️Operates in half-hourly batches (24x7 availability).
➡️No minimum or maximum transaction limit.
➡️Funds are settled in a deferred net settlement (DNS) mode.
➡️Transactions are processed in batches, so there may be a slight delay in fund credit.
➡️No charges for NEFT transactions initiated online via internet banking or mobile banking.

Best Used For:
➡️Transferring money when speed is not critical.
➡️Paying bills, loan EMIs, or sending money to suppliers/vendors.

 

2. Real-Time Gross Settlement (RTGS)

Overview:
RTGS is a high-value fund transfer system where transactions are settled individually and instantly. It is primarily used for large transactions where immediate fund settlement is necessary.

Key Features:
⭕Real-time settlement, meaning transactions are processed instantly.
⭕Minimum transaction amount: ₹2 lakh.
⭕No maximum transaction limit (subject to bank-imposed restrictions).
⭕Transactions are processed on a gross settlement basis (each transaction is settled separately without batching).
⭕No charges for online RTGS transactions.

Best Used For:
⭕High-value transactions where immediate fund transfer is required.
⭕Business transactions, large investments, and property purchases.

 

3. Immediate Payment Service (IMPS)

Overview:
IMPS is an instant interbank electronic fund transfer system available 24x7, including weekends and holidays. It is widely used for quick and small-value transfers.

Key Features:
✅Funds are transferred instantly in real time.
✅Available 24x7, including weekends and holidays.
✅Minimum transaction amount: ₹1.
✅Maximum transaction limit: ₹5 lakh (varies by bank).
✅Transactions can be done using an Account Number & IFSC or a Mobile Number & MMID.
✅Nominal charges may apply for IMPS transfers, depending on the bank.

Best Used For:
✅Small, quick transactions, such as emergency payments, mobile recharges, and peer-to-peer transfers.
✅Transferring money instantly when NEFT and RTGS are unavailable.

 

Comparison Table: NEFT vs RTGS vs IMPS

Feature	NEFT	RTGS	IMPS
Settlement Type	Batch-wise	Real-time	Real-time
Speed	Within a few hours	Instant	Instant
Minimum Amount	No limit	₹2 lakh	₹1
Maximum Amount	No limit	No limit	₹5 lakh (varies by bank)
Availability	24x7	24x7	24x7
Charges	No charges for online transfers	No charges for online transfers	Nominal charges apply
Best For	Regular transactions	High-value transfers	Instant small-value transfers

 

Conclusion
Choosing between NEFT, RTGS, and IMPS depends on your transaction needs. If you need quick, high-value transfers, RTGS is the best choice. If speed is not a priority, NEFT is a reliable and cost-effective option. On the other hand, for instant small-value transfers, IMPS is the most convenient method. Understanding these differences will help you select the right mode of fund transfer, ensuring seamless and efficient banking transactions.