Navigating the differences between IMPS, NEFT and RTGS

If you need to make a big transaction instantly, what should you do? Should you opt for IMPS, NEFT or RTGS? What do they mean and which one must you use? Let us understand in detail about NEFT vs RTGS vs IMPS. Knowing more about these digital transactions will help you make an informed decision.

NEFT

National Electronic Funds Transfer (NEFT) is a widely used method for transferring funds between banks in India. It operates on a deferred net settlement basis, which means transactions are processed in batches.

Key features of NEFT

1. Batch processing: Transactions are settled in hourly batches, with a typical delay of a few hours within bank operating times.

2. Availability: Available 24x7, including holidays.

3. Transfer limits: No minimum or maximum limits on transaction amounts.

4. Cost-effective: Nominal fees; vary with the amount transferred.

RTGS

Real-Time Gross Settlement (RTGS) is designed for high-value transactions needing real-time settlement. Unlike NEFT, RTGS processes transactions individually as they occur, ensuring immediate transfer.

Key features of RTGS

1. Real-time processing: Immediate settlement of funds within business hours.

2. High-value transactions: The minimum transfer amount is ₹2 lakh, with no upper limit.

3. 24x7 availability: Available round the clock, including holidays.

IMPS

Immediate Payment Service (IMPS) offers the fastest money transfer among the three, providing real-time transfer of funds 24x7.

Key features of IMPS

1. Instant transfer: Real-time fund transfer across banks.

2. 24x7 service: Available round the clock, even on holidays.

3. Versatile access: Accessible via mobile banking, internet banking, ATMs and SMS.

Transfer limits: Typically up to ₹5 lakh per day, varying by bank.

Differences between NEFT, IMPS and RTGS

Important things to consider before initiating a fund transfer

1. Transfer amount: Determine the amount you need to transfer. For high-value transactions (₹2 lakh and above), RTGS is preferable owing to its real-time processing. For smaller amounts, NEFT and IMPS are suitable.

2. Urgency: If you need instant transfer, IMPS is the best choice. For same-day transfers with a few hours delay, NEFT is ideal. For immediate large transactions, opt for RTGS.

3. Availability: Ensure the chosen method is available 24x7 if transferring outside regular banking hours. IMPS, NEFT and RTGS are now available round the clock, including holidays.

4. Cost: Compare transaction fees. IMPS and NEFT usually have nominal charges, while RTGS fees can vary based on the bank and transaction amount.

5. Bank support: Confirm that both the sender and recipient banks support the chosen transfer method for seamless processing. Axis Bank's digital services allow you to access all of these transfer methods via Internet and mobile banking.

Which is better - NEFT, RTGS or IMPS?

• NEFT: It is ideal for non-urgent, routine transactions, such as paying bills or salaries. It's cost-effective and can handle any transaction amount, although it processes in hourly batches, causing slight delays.
• RTGS: It is ideal for high-value transactions (₹2 lakh and above) requiring immediate settlement. It offers real-time processing and is available 24x7, ensuring quick and secure large transfers.
• IMPS: It is ideal for urgent, small to medium-sized transactions needing instant transfer. It’s available round the clock, even on holidays, and supports various access points like mobile and Internet banking.

Also Read: Complete guide on how to open a Savings Account in 5 easy steps

FAQs

How many times can NEFT transactions be done in a day?
NEFT transactions can be done multiple times a day, as there is no limit on the number of transactions.

How long does it take for money to get transferred online?
RTGS and IMPS transfers are instant, while NEFT processes usually take a few hours.

Are there any extra charges for an IMPS transfer?
Yes, IMPS transactions typically incur a nominal fee, which varies by bank.

Is the RTGS mode of payment safe?
Yes, RTGS is a secure mode of payment with real-time processing.

Is IMPS a better mode of transfer than NEFT and RTGS?
IMPS is faster for small to medium-sized transactions, while RTGS is ideal for large, urgent transfers. NEFT works best for non-urgent payments. You can select the method depending on your specific needs.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.