Technology

Modes of online payment: NEFT, RTGS,  IMPS, UPI, and which one to choose

Gone are those days when you would have to go to the bank physically to transfer money from one bank account to another. Over the past few decades, the banking environment has transformed from paper receipts to digital receipts. Digital methods are so fast, simple, and convenient that they help people transfer and receive the money within a matter of a few minutes only. Though there are various online transferring methods such as Gpay, Paytm, Amazon Pay, etc., the most trusted and commonly used domestic money transfer methods in India are NEFT, RTGS, and IMPS. 

While these three services are offered through Indian banks, each money transfer service operates with different timing, different settlements type, and transaction limits. That is why sometimes people get confused between the three. But fret not. Here we have to make it very simple for you to understand what all these three methods are all about and when to use each. In this article, you will also see an NEFT vs RTGS vs IMPS comparison table that will help you to differentiate these three money transfer methods from each other. So, keep reading further.

NEFT, RTGS, IMPS in brief

NEFT: National Electronic Fund Transfer, commonly known as NEFT, is a nationwide payment transferring method owned & operated by the Reserve Bank of India (RBI). NEFT has made the fund transfer process a lot easier and simpler for people. With the help of this money transferring method, you can transfer money digitally from one account to another, provided the bank is operational in India. Even if the sender or receiver does not have a bank account in the same bank, a money transfer through NEFT is still possible. But make sure the bank should be categorized under NEFT. The method can be used by corporate firms as well as individuals. Another great feature of NEFT is that it is available 24×7. You can transfer money any day, any time effortlessly. 

Unlike RTGS, there are no minimum or maximum limits to the amount that can be transferred through NEFT. However, one can only transfer Rs. 50,000 per transaction.  

Settlements run on the 30-minute between traditional banking hours. Hence, all settlements are done on the basis of half-hour in batches. All fund transfer requests received between that half-hour are processed together. After that, the receiver can expect the fund to be credited to his/her bank account within 2 hours of batch settlement. 

RTGS: It stands for Real-Time Gross Settlement. Operated by the Reserve Bank of India (RBI), this fund transfer method is used for high-value transactions, with its minimum transfer amount set to RS. 2 lakh. 

RTGS has two key elements associated with it. The first one is “real-time”, which means it enables instant transfers, while the second element is the “gross settlement”, which means the settlement occurred on a one-by-one basis. The key difference between NEFT and RTGS is that RTGS is mainly used for large value transactions that need immediate clearance. From December 2020 onwards, money transfers through RTGS can be done 24×7.

IMPS: IMPS full form is Immediate Mobile Payment Service. It is another real-time fund transfer service that is available 24×7, 365 days. Managed by NPCI (National Payments Corporation of India), this method can be used to transfer funds immediately. Several digital banks in India use this service to transfer funds. However, the transaction charges may differ from one bank to another. 

There is no minimum limit to the amount that can be transferred through this method, but the maximum amount limit is capped at RS. 2 Lakh. 

NEFT vs RTGS vs IMPs: Which one to choose?

Now that you know about these three digital money transfer methods, we will show the key difference between them through an NEFT vs RTGS vs IMPs comparison table. Let’s have a look:

Category  NEFT RTGS IMPS
Minimum Transfer Value Rs. 1 Rs. 2 Lakh Rs. 1
Maximum transfer value No Limit No Limit Rs. 2 Lakh
Duration of Settlement Half-hourly Immediately Immediately
Service Availability  24×7, 365 days 24×7, 365 days 24×7, 365 days
Online/Offline Offline as well as online Offline as well as online Online 

With this NEFT vs RTGS vs IMPs comparison table, you can see that all these three methods are meant for different situations. You can opt for any of them as per your suitability and preference. 

But will these last options consider the emergence of UPI-based apps?

Well, in a country where everyone is not tech-savvy, it is expected that these services will be retained by the banks for a considerable amount of time. Moreover, UPI requires debit card details, and most people, due to security threat, doesn’t apply for a card; hence, not applicable to use UPI-based service. Though UPI is indeed the best payment system for those, who wish to send and receive instant payment, at the same time, one has to consider the preferences of most of us Indians. For activating the UPI based service, one must do the following: 

  • Download any UPI based app
  • Complete the registration online by entering your account details
  • Creating a virtual identification should be followed by setting the mobile PIN. 

Note: From shopping to bill payments, UPI can be used for various things. At present, the transaction limit under UPI is Rs. 1 Lakh per transaction, but there are no charges on customers for using it. The only drawback of this mode of payment is that not everybody accepts UPI payment, but in the near future, it is expected that from our vegetable vendor to the nearby shop, people will be making payments via this mode a lot. 

The Bottom Line

There are a plethora of benefits to using these digital money transfer methods. Not only these methods are fast, convenient, and secure, but also they can be accessed from anywhere, anytime. Depending on the amount and the needed urgency of the fund transfer, you can choose any of these methods which suit your requirement the most. Make sure you keep factors such as transaction limit, speed, additional charges, and duration in mind before choosing any of them. 

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