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Difference between NEFT and IMPS

With the advancement of technology, the digital money transfer system is gaining popularity thanks to its speed, simplicity, security and convenience. Funds can be transferred electronically from one bank / account / location / branch to another via this system. In addition, the system allows immediate account updates and provides quick exchange rate information. In India, NEFT and RTGS are the two electronic media that transfer funds. While the former used to manage smaller transactions, the latter has an effect on big ticket transactions.

The two electronic payment systems provide intra and interbank funds transfers, within and across the city. NEFT the acronym for National Electronic Fund Transfer, where the transfer of funds is based almost in real time. On the other hand, RTGS or otherwise called as gross regulation in real time, there is a continuous or immediate transfer of funds.

Take a look at the article below to understand the differences between NEFT and RTGS.

Comparative chart

Basis for comparison NEFTRTGS
Sense NEFT is an online money transfer system where payment is made in near real time. RTGS an electronic payment system in which funds are transferred at the same time as the transaction took place.
Introduced in 2005 2004
base Deferred Net Settlement (DNS) One by one
Work hours On all working days (except on 2nd and 4th Saturday) from 8:00 to 19:00 On all working days (except on 2nd and 4th Saturday) from 9:00 to 16:30
Settlement cycle 12 settlements in one working day Continuous settlement
It works on Hourly lots Real time
Ceiling limit No limit, but the maximum amount per transaction limited to Rs. 50,000 (for cash-based payments within the country and payments in Nepal). Minimum – 2 lakh, Maximum – No limit
Appropriate for Small value transaction High value transaction
under processing Comparatively slow Fast

Definition of NEFT

The transfer of national electronic funds or NEFT defined as a nationwide fund transfer mechanism through which an individual or company can easily transfer money from one account / bank / branch to another. The system is based on deferred net settlement, in which transactions are processed in hourly batches. In this system, transactions are held for a specific time.

The system was first introduced in Nov 2005 to replace Special Electronic Fund Transfer (SEFT). As per diktat of the Reserve Bank of India (RBI), it was mandatory for all banks to switch to the NEFT system from the SEFT system. Since then, the SEFT system has not been in vogue.

Only NEFT-enabled bank branches are authorized to proceed with NEFT transactions. All people who have a bank account with a NEFT-enabled bank branch are eligible to transfer money with the help of this system. However, having an unnecessary bank account, an individual / company can also deposit cash with the bank which instructs the transfer of funds via NEFT. Such customers are known as Walk in customers.

The bank charges a nominal amount for the provision of this service known as processing or service fees.

Definition of RTGS

The electronic system in which funds are transferred in real time online known as RTGS or Real Time Gross Settlement. Real time refers to the processing of transactions made at the same time the order is received. In this way, there are no further delays in the settlement of transactions. Gross means that each individual transaction is settled individually or on a one to one basis.

The RTGS system managed by the Central Bank of India and therefore the transactions appear in the books of the RBI. Applies to amounts equal to or greater than Rs. 2, 00, 000. Only branches enabled for RTGS can participate in the RTGS transaction. There are more than 1,00,000 branches across the country that are part of this scheme.

These transactions are processed continuously during business hours. The bank charges a nominal amount for the provision of this service, but is only withdrawn for the outgoing transaction and not for the inward transaction.

Key differences between NEFT and RTGS

The basic differences between NEFT and RTGS are shown below:

  1. NEFT stands for National Electronic Fund Transfer; an online payment mechanism through which funds are transferred from one place or branch or account to another. Real Time Gross Settlement or RTGS an online money transfer tool, in which funds are transferred to education for education.
  2. NEFT was introduced in 2005 as a replacement for Special Electronic Fund Transfer (SEFT). In contrast, RTGS was introduced in 2004.
  3. NEFT based on the DNS system (Deferred Net Settlement), while the RTGS function on an individual basis.
  4. The normal working hours on working days, leaving on 2nd and 4th Saturday for NEFT and RTGS are from 8:00 to 19:00 and from 9:00 to 16:30.
  5. There are a total of 12 settlements in one working day in case of NEFT. But if we talk about RTGS, settlement takes place continuously.
  6. NEFT operates in hourly batches while RTGS operates in real time.
  7. There is no minimum or maximum ceiling limit in NEFT. However, the amount per transaction must not exceed Rs. 50,000 for cash-based remittances in the country and payments in Nepal. On the other hand, RTGS has a minimum limit of 2 lakh and there is no bar on the ceiling.
  8. NEFT the best for small value transactions. Unlike RTGS, which is appropriate for high-value transactions.
  9. RTGS is an instant fund transfer mechanism, but NEFT takes the time to transfer funds.


Although the old check clearing system still exists, but as people are becoming technologically advanced, they prefer new, time-saving methods of transferring funds. NEFT and RTG are very convenient ways of transferring funds even in remote places in a very short time. The network of both systems is very strong. Both systems are connected to over 1,000,000 bank branches.