Differences between NEFT, RTGS and IMPS: Limit, charges, timings, full form

Technology has made the process of transferring money much easier and quicker. Previously, people had to rely on cheques and other offline methods for fund transfers that could take several days. Now, financial institutions, private companies and government institutions have adopted online payment and settlement methods, which are much faster.

NEFT, RTGS and IMPS are the most commonly-used methods of online fund transfers in our country today. While the Reserve Bank of India (RBI) introduced NEFT and RTGS, the National Payments Corporation of India (NPCI) introduced IMPS. 

Read on to know their differences and other important details. 

Features of payment systems

Before we proceed to check their differences, it’s essential to understand the basic concepts related to these payment systems:

• Fund transfer limit 

Fund transfer limit means the minimum and maximum amount that can be transferred via a payment system. The amount allowed by NEFT, RTGS and IMPS differs.

• Service availability 

Certain payment systems are available 24x7, while for others, users have to abide by specific timings. Remitters can initiate fund transfers anytime using these payment systems, but funds are settled only when the service is made available.

• Fund transfer charges 

Fund transfers have certain charges as decided by the financial institution. Fund transfer charges depend on the transfer speed, amount to be transferred and other terms of a financial institution.

• Fund settlement speed 

Fund settlement speed refers to the time required to settle the transfer of money from one account to another after it has been initiated.

Differences between NEFT, RTGS and IMPS

Now, let’s take a glance at the differences between NEFT, RTGS and IMPS:

For more exact details, check the following sections. 

NEFT, RTGS and IMPS full form

Here are the full forms and meanings of the above payment methods:

• NEFT

The full form of NEFT is National Electronic Funds Transfer. It is an online payment system facilitating one-to-one fund transfers. You can use NEFT to transfer funds electronically from your bank account to that of another person. But you must remember an important factor- NEFT transfers don’t occur in real time. 

• RTGS

The full form of RTGS is Real-Time Gross Settlement. If you use this online payment system to transfer money, the amount will get credited to the beneficiary's account in real-time. 

• IMPS 

The full form of IMPS is Immediate Mobile Payments Services. This online payment system facilitates inter-bank funds transfer system in real-time. An important factor to note is that you can use IMPS 24x7 throughout the year, including bank holidays. 

NEFT, RTGS and IMPS limit

Here’s the information regarding the minimum and maximum limit of funds that can be transferred:

• NEFT

The lowest amount you can transfer with NEFT is Rs. 1. There's no limit on the maximum amount. But as per the Indo-Nepal Remittance Scheme, the maximum amount per transaction should be Rs. 50,000 for cash-based remittances within India and Nepal.

• RTGS

Here, you need to transfer at least Rs. 2,00,000 to transfer money via RTGS. There’s no upper limit.

• IMPS

The minimum amount allowed is Rs. 1, while the maximum amount allowed is Rs. 2,00,000. 

NEFT, RTGS and IMPS charges

The details of the transaction charges are as follows: 

• NEFT 

No transaction charge is required for inward transactions that take place for crediting money to beneficiary accounts at destination bank branches. 

• RTGS

No transaction charges are required for online and inward transactions. However, some charges are applicable for outward transactions. You have to pay Rs. 25 for transferring funds from Rs. 2,00,000 to Rs. 5,00,000. Rs. 50 is the transaction charge for transferring an amount exceeding Rs. 5,00,000. Do note that GST is applicable on these charges.

• IMPS 

Individual member banks and PPIs determine the transaction charges. 

NEFT, RTGS and IMPS timings

The service timings of these payment systems are as follows: 

• NEFT- 24x7 
• RTGS- 24x7 
• IMPS- 24x7 

NEFT, RTGS and IMPS- Which is better? 

You need to align your choice of payment system with your financial requirement. For instance, if you wish to transfer a lump sum amount, RTGS will be more appropriate. You can consider NEFT and IMPS if you want to transfer lesser amounts.

To decide on the most suitable payment and settlement system, you need to take into consideration the following factors: 

• Timings 

You need to note that the timings for NEFT, RTGS and IMPS transfers will vary across banks. While RTGS operating timing will depend on the bank and location, NEFT and IMPS payment and settlement modes are available 24x7. 

• Network

An essential factor you must note is that both the receiver and sender must be a part of the same network. It helps in the successful execution of the transfer.

• Transaction fee 

You might have to pay a separate transaction fee for transferring money. However, the transaction fee will not apply if the recipient cannot receive your sent funds. 

• Payment modes

These fund transfer methods- NEFT, RTGS and IMPS work for online transactions. But NEFT also allows offline fund transfers. You can fill out an NEFT transfer form at any bank branch along with all the necessary details to transfer money.

Final words 

NEFT, RTGS and IMPS are widely used payment and settlement systems in India. While the services of these fund transfer systems are available 24x7, NEFT transfers don't take place in real-time, i.e. it takes place in half-hourly batches. While deciding on the payment transfer system, consider timing, network, transaction fee and payment modes available.