Difference between NEFT and RTGS

NEFT and RTGS are the two online systems for fund transfers between different banks in India and managed by the Reserve bank of India. The procedure followed by NEFT is different from RTGS.

NEFT payment system

The meaning of NEFT is National Electronic Fund Transfer. This is an online payment system where payment can be done on an account to account basis from one bank to another who participate in this scheme. The bak account can be individual firm or corporate. All the transfer requests are compiled and  executed in hourly batches by RBI. There are twelve settlements from 8 am to 7 pm on week days (Monday through Friday) and six settlements from 8 am to 1 pm on Saturdays. If the request is received after cut off time the request is executed the next day. Transaction charges Rs 2.5 for payments upto Rs 10,000, Rs 5 for payments between 10,000 and 1,00,000, Rs 15 for payments between one and two lakh and Rs 25 above Rs 2 Lakh

RTGS payment system

The meaning of RTGS is Real Time Gross Settlement system. In this system there are no hourly batches. The transaction is done in real time, so this is the fastest online payment transfer system. The RTGS payment system is mainly  meant for large value transactions. The minimum amount to be transferred  through RTGS is rupees two Lakhs. There is no upper ceiling for RTGS transactions. RTGS timings are from 9:00 AM to 4:30 PM on weekdays and 9:00 AM to 2:00 PM on Saturdays. Transaction charges Rs 30 for 2 to 5 Lakhs and Rs 55 above RS 5 Lakhs.

The following is the broad Difference between NEFT and RTGS

  • NEFT payments are done in batches where as RTGS is done in realtime
  • RTGS payment system is faster than NEFT
  • RTGS is mainly for large value transactions of Rs. 2 Lakhs or more
  • In RTGS More details of bank account to whom payment is to be transferred needs to be provided to the bank as compared to NEFT
  • NEFT is the best mode for low value transactions
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