NEFT vs RTGS: Limit, Time, and Charges

For making online money transfers, NEFT and RTGS are two of the most common methods available in India. Both of them are owned and operated by the Reserve Bank of India, which is the central banking institution of the country. Therefore, both the methods are highly secure. The full form of NEFT and RTGS are National Electronic Funds Transfer and Real-Time Gross Settlement, respectively. 

NEFT has no minimum limit. However, RTGS requires a minimum amount of Rs. 2 lakhs. RTGS is typically instantaneous but NEFT takes between 30-120 minutes. Apart from these differences, there are many other differences between NEFT vs RTGS that we shall discuss in this blog post!

What is NEFT?

NEFT full form is National Electronic Funds Transfer. It was introduced in India in November 2005. NEFT meaning can be explained as an RBI-operated online money transfer method where the funds are transferred from one NEFT-enabled bank account to another in a secure and cost-effective manner. There is no minimum amount requirement for making NEFT transfers. 

The NEFT transactions are processed within 30 minutes. However, in some cases, it may take up to 2 hours. It is ideal for day-to-day online transactions. It is absolutely free of cost for the savings bank customers when initiated online. However, for bank branch transactions, minimal fee + GST is applicable.

What is RTGS?

RTGS full form is Real-Time Gross Settlement. It was introduced by the RBI on 26 March 2004. RTGS meaning can be explained as an RBI-operated online money transfer method where the funds are transferred from one RTGS-enabled bank account to another in a safe and cost-efficient manner. Unlike the NEFT method, the RTGS method requires a minimum amount of Rs. 2 lakh per transaction.

Additionally, RTGS processes transactions instantaneously, i.e., in real time. RTGS is free for the savings bank customers when the payment is initiated online. However, when the payment is initiated at a bank branch, minimal fee + GST applies. 

Difference between NEFT and RTGS

The difference between NEFT and RTGS can be understood with the help of the table provided below:

List of Major Banks Offering NEFT & RTGS

The list of major banks offering NEFT and RTGS includes the following:

• State Bank of India
• Punjab National Bank
• Bank of Baroda
• Bank of India
• Canara Bank
• Union Bank of India. 
• HDFC Bank
• ICICI Bank
• Axis Bank
• Yes Bank
• Kotak Mahindra Bank
• IndusInd Bank. 
• Nainital Bank
• Dhanlaxmi Bank
• DBS Bank India

Apart from these banks, many other banks in the country offer NEFT and RTGS services.

Conclusion

Both NEFT and RTGS are popular electronic payment methods in India. Both of them are highly secure and reliable as they are owned and operated by the Central Bank. You can conduct NEFT and RTGS transactions online via net banking or mobile banking for absolutely free. Alternatively, you may visit your bank’s branch to initiate the transaction; however, ‘minimal’ charges may apply in such cases. 

Frequently Asked Questions (FAQs)

Q1. What is the difference between RTGS and NEFT?

Both RTGS and NEFT are owned as well as operated by RBI. The RTGS method involves real-time, individual settlement of fund transfers where transactions are processed instantly. On the other hand, the NEFT method involves batch-wise settlement of transactions where payments are grouped and processed at fixed intervals of time, usually between 30-120 minutes. 

Q2. What is RTGS full form?

RTGS full form is Real Time Gross Settlement. It is an electronic payment method that allows users to make instant, high-value payments.

Q3. What is NEFT full form?

NEFT full form is National Electronic Funds Transfer. It is an electronic payment method that allows users to make payments in 30-120 minutes.

Q4. Is NEFT available on bank holidays?

Yes, it is available 24×7, including on bank holidays.

Q5. Is RTGS available on bank holidays?

Yes, it is available 24×7, including on bank holidays. 

Q6. What is the minimum amount for an RTGS transaction?

The minimum amount required for conducting an RTGS transaction is Rs. 2 lakhs.

Q7. Is RTGS faster than NEFT?

Yes, RTGS is faster than NEFT. The former method allows for instant payment compared to the latter method that takes about 30-120 minutes. However, it is important to know that the minimum transaction amount for RTGS is Rs. 2 lakhs. NEFT, on the other hand, has no minimum transaction amount limit and allows you to transfer as low as Re. 1. 

Q8. When were RTGS and NEFT launched in India?

RTGS was launched in India on 26 March 2004. NEFT was launched more than a year after RTGS’s launch, i.e., in November 2005.