The difference between NEFT and RTGS: Are you searching the difference between NEFT and RTGS services provided by various banks all over the country? I am sure, you will be using either NEFT or RTGS service. Both the services have some of the Advantages. Here, we will provide you in detail the Difference between NEFT and RTGS services.
NEFT and RTGS services are used to transfer funds electronically from one bank to another in India. Both the services are being maintained by the Reserve Bank of India.
NEFT
NEFT stands for National Electronic Funds Transfer, Using which you can transfer money from one bank to another all over the India. The system mainly works on the Deferred Net Settlement, in which the transactions are being processed in hourly batches.
The NEFT system has come into practice in 2005 in order to replace the Special Electronic Funds Transfer (SEFT). Due to the order to the Reserve Bank of India, it was compulsory for all the banks to switch over to NEFT.
You can perform NEFT transactions in all the NEFT Supported banks. All the people who have their account in the NEFT supported bank branches can transfer funds using the system. However, even if a person who doesn’t have a bank account in NEFT Supported bank, he/she can transfer money by cash to the beneficiary by providing details about beneficiary. All such types of customers are known as Walk in Customers. A customer can transfer up to Rs 50,000 via NEFT to another person via Cash.
RTGS
RTGS stands for Real Time Gross Settlement which is used to transfer funds from one bank to another on “real time” basis as well as “gross basis”. In RTGS, all the transactions are being made immediately as soon as they are received. RTGS is the fastest way to transfer money to any bank all over the India. Real-time means the money will be transferred immediately without any delay. While in the worst case, there will be a delay of not more than 2 hours. Also, one will not be able to transfer money on all the public holidays as well as 2nd and 4th Saturday of every month.
The whole RTGS system is being maintained by the Reserve Bank of India. Any customer who wants to transfer a large amount of money can transfer it using the RTGS System. Also, a customer who doesn’t have an account in a RTGS enabled bank can transfer money to the beneficiary, provided that the beneficiary should have an account in RTGS enabled bank.
Difference between NEFT and RTGS
The main difference between NEFT and RTGS is that NEFT is mainly based on “Net Settlement” while the RTGS is mainly based on the “Gross Settlement”. In Net Settlement, all the transactions are being completed in batches on particular time intervals. In Gross Settlement, all the transactions are being performed in one to one basis. The differences between NEFT and RTGS is given below:
| Criteria | NEFT | RTGS |
|---|---|---|
| Meaning | NEFT is used to,transfer money from one bank to another where payment is done in real time,basis. | RTGS is also used,to transfer funds. In RTGS, the funds will be transferred immediately |
| Basis | Deferred Net,Settlement | Works on basis of,One to one transfer |
| Timings | Working hours,(expect 2nd and 4th Saturday) are 8:00 AM to 7:00 PM | Working,Hours(expect 2nd aand 4th Saturday) are 9:00 AM to 4:30 PM |
| Fuctions | Specific Hourly,batches | Real time |
| Minimum and Maximum,Transfer limit | No Minimum as well,as Maximum Transfer limit | Minimum Transaction,limit is 2 lakh Rupees & Maximum Transaction limit is Rs 10 lakh |
| Transactions | Focuses on the High,Value Transactions | Focuses mianly Low,value Transactions |
| Settlement Cycles | Total 12 Settlement,Cycles on working day | |
| Charges laid by RBI per transaction | Transaction upto Rs,10,000 – Rs 2.5 + Service Tax Transaction between Rs 10,000 to 1 Lakh – Rs. 5,+ Service Tax Transaction between 1 Lakh to 2 Lakh – Rs 15 + Service Tax Transaction above 2 lakhs – Rs. 25 + Service Tax |
Trasaction upto Rs,2 to 5 laks – Rs. 25 + Service Tax & Transaction between Rs 5 lakh to 10,laks – Rs. 30 + Service Tax |
From the above differences, you will be able to decide which Systems is suitable for you. We Hope that you liked this article. If you liked this article, then please share it with your family and friends.
