NEFT, RTGS, IMPS: Complete Guide to Bank Transfers in India

Introduction: Moving Money Across Banks

When Sharma ji in Delhi needs to pay his son’s college fee to a bank in Chennai, how does the money travel? When a business needs to pay a supplier ₹50 lakhs urgently, what’s the fastest way? When you need to transfer ₹5,000 to a friend at midnight, which method works?

India has three primary electronic fund transfer systems—NEFT, RTGS, and IMPS—each designed for different needs. Understanding them helps you choose the right method, save money on charges, and ensure your transfers happen when you need them.

Quick Comparison

NEFT: National Electronic Funds Transfer

What is NEFT?

NEFT is a nation-wide electronic fund transfer system enabling transfer of funds from one bank account to another. It operates on a deferred net settlement (DNS) basis.

How NEFT Works

Settlement Mechanism:

Transactions collected in batches
        ↓
Processed every 30 minutes
        ↓
Net settlement between banks
        ↓
Credit to beneficiary

Key Feature: Batch processing (not real-time)

NEFT Timing

Since December 2019:

• Available 24 hours
• 7 days a week
• 365 days a year
• Settlement every 30 minutes

48 Settlement Batches Daily:

• Every half hour
• No holidays
• Round the clock

NEFT Limits

NEFT Charges

RBI Mandate (Online): Banks are encouraged to offer free NEFT for savings accounts.

Typical Charges:

Charges vary by bank—many offer free online NEFT

How to Do NEFT Transfer

Online Banking:

1. Login to net banking
2. Add beneficiary (account + IFSC)
3. Wait for activation (few hours)
4. Select “Fund Transfer” > “NEFT”
5. Enter amount and purpose
6. Confirm with OTP/password
7. Transaction queued for next batch

At Branch:

1. Fill NEFT form
2. Provide beneficiary details
3. Sign and submit with ID
4. Collect acknowledgment

When to Use NEFT

Best For:

• Regular fund transfers
• Non-urgent payments
• Any amount (no upper limit)
• Free online transfers
• Bulk payments

Not Ideal For:

• Urgent transfers (use RTGS/IMPS)
• Very small urgent amounts (use IMPS)

RTGS: Real Time Gross Settlement

What is RTGS?

RTGS is a funds transfer system where money is transferred from one bank to another on a real-time and individual (gross) basis. It’s designed for large-value transactions.

How RTGS Works

Settlement Mechanism:

Transaction initiated
        ↓
Processed individually
        ↓
Real-time settlement
        ↓
Immediate credit (within seconds)

Key Features:

• Real-time = No batching
• Gross = Each transaction settled individually
• Immediate = Seconds, not hours

RTGS Timing

Since December 2020:

• Available 24 hours
• 7 days a week
• 365 days a year
• True real-time, anytime

RTGS Limits

Why ₹2 Lakh Minimum? RTGS is designed for large-value transactions. For smaller amounts, use NEFT or IMPS.

RTGS Charges

RBI Mandate: No charges for online RTGS transactions.

Typical Charges (if applicable):

Most banks offer free online RTGS

How to Do RTGS Transfer

Online Banking:

1. Login to net banking
2. Add beneficiary (account + IFSC)
3. Wait for activation (may be instant for RTGS)
4. Select “Fund Transfer” > “RTGS”
5. Enter amount (min ₹2 lakhs)
6. Confirm with OTP/2FA
7. Transfer processed in seconds

At Branch:

1. Fill RTGS form
2. Provide beneficiary details
3. Submit with ID proof
4. Transfer processed quickly
5. Collect acknowledgment

When to Use RTGS

Best For:

• Large transfers (₹2 lakh+)
• Urgent high-value payments
• Property transactions
• Business payments
• Same-day settlement needs

Not Suitable For:

• Amounts below ₹2 lakhs
• Small personal transfers

IMPS: Immediate Payment Service

What is IMPS?

IMPS is an instant interbank electronic fund transfer service that enables 24x7x365 instant transfer of funds. It was launched by NPCI in 2010.

How IMPS Works

Settlement Mechanism:

Transaction initiated
        ↓
Processed immediately
        ↓
Debit sender's account
        ↓
Credit receiver's account
        ↓
Confirmation to both parties

All in seconds!

IMPS Timing

• Available 24 hours
• 7 days a week
• 365 days including holidays
• True instant transfer

Unlike NEFT (batch) or RTGS (large value), IMPS works for any amount, anytime.

IMPS Limits

Some banks allow up to ₹5 lakh per transaction, others cap at ₹2 lakh

IMPS Charges

Typical Charges:

Charges vary by bank

Why Not Free Like NEFT/RTGS? IMPS involves real-time processing infrastructure costs. However, UPI (built on IMPS rails) is free for individuals.

Methods to Do IMPS

Via Mobile Banking:

1. Login to mobile app
2. Select “Transfer” > “IMPS”
3. Enter account number + IFSC
4. Or use mobile number (MMID)
5. Enter amount
6. Confirm with MPIN/OTP
7. Instant transfer

Via MMID (Mobile Money Identifier):

• Unique 7-digit code
• Linked to mobile + bank account
• Transfer using mobile number + MMID

Via Account + IFSC:

• Traditional method
• Need full bank details

Via Aadhaar:

• Aadhaar number linked to bank
• Transfer to Aadhaar-linked account

When to Use IMPS

Best For:

• Urgent small transfers
• Anytime, anywhere transfers
• When UPI not available/working
• Mobile-initiated transfers

Less Ideal For:

• Large amounts (₹5L+ use RTGS)
• When charges matter (use UPI for free)

NEFT vs RTGS vs IMPS: Detailed Comparison

By Transaction Speed

By Amount Suitability

By Urgency

By Cost

Pro Tip: For transfers up to ₹1 lakh, use UPI for free instant transfers.

Understanding Settlement

NEFT: Deferred Net Settlement (DNS)

How It Works:

Morning Batch (say 9:00 AM):
Bank A sends ₹10 lakh to Bank B
Bank B sends ₹8 lakh to Bank A
─────────────────────────────
Net: Bank A pays Bank B ₹2 lakh

Advantage: Efficient for banking system Disadvantage: Takes time (up to 30 min)

RTGS: Real Time Gross Settlement

How It Works:

Each transaction processed individually:
9:00:01 - ₹5 lakh A→B: Processed immediately
9:00:02 - ₹3 lakh B→A: Processed immediately
No netting, no waiting

Advantage: Immediate, certain Disadvantage: Requires more liquidity

IMPS: Individual Settlement

How It Works:

Similar to RTGS but for smaller amounts
Each transfer settled individually
Instant confirmation to both parties

Common Issues and Solutions

NEFT Transfer Delayed

Possible Reasons:

• Wrong beneficiary details
• Bank server issues
• Holiday processing delays

Solution:

• Wait for next settlement batch (30 min)
• Check beneficiary details
• Contact bank if >2 hours

RTGS Failed

Possible Reasons:

• Below ₹2 lakh minimum
• Wrong account/IFSC
• Beneficiary bank offline

Solution:

• Verify amount > ₹2 lakh
• Double-check details
• Contact bank immediately

IMPS Deducted But Not Credited

Possible Reasons:

• Technical timeout
• Beneficiary account issue
• Network glitch

Solution:

• Wait 30 minutes
• Check with beneficiary
• Raise dispute in banking app
• Auto-reversal usually in 24-48 hours

Money Sent to Wrong Account

Immediate Steps:

1. Contact your bank immediately
2. Request recall
3. File written complaint
4. Approach RBI Ombudsman if unresolved

Reality: If credited to wrong account, recovery depends on beneficiary’s cooperation.

IFSC Code Explained

What is IFSC?

Indian Financial System Code

• 11-character alphanumeric code
• Identifies bank branch
• Essential for NEFT/RTGS/IMPS

IFSC Structure

HDFC0001234
│    │  │
│    │  └── Branch code (last 6 digits)
│    └── 0 (always zero)
└── Bank code (first 4 letters)

Examples:

• SBIN0001234 → SBI branch
• HDFC0001234 → HDFC Bank branch
• ICIC0001234 → ICICI Bank branch
• PUNB0001234 → PNB branch

Finding IFSC

Methods:

1. Cheque book: Printed on cheque leaf
2. Passbook: Usually on first page
3. Net banking: Account details section
4. RBI website: ifsc.bankifsccode.com
5. Bank website: Branch locator

Best Practices

Before Transferring

✅ Double-check account number ✅ Verify IFSC code ✅ Confirm beneficiary name ✅ Save beneficiary for future ✅ Start with small test transfer (new beneficiaries)

Choosing the Right Method

Security Tips

✅ Use official banking apps/websites ✅ Never share OTP/password ✅ Verify details before confirming ✅ Keep transaction records ✅ Update mobile number with bank

Key Takeaways

1. NEFT: Free, batch processing (30 min), any amount, best for regular transfers
2. RTGS: Free, instant, ₹2 lakh minimum, best for large urgent transfers
3. IMPS: Paid (₹2-25), instant, up to ₹5 lakh, best for urgent small transfers
4. All 24x7: All three work round the clock now
5. UPI for small: Use UPI for free instant small transfers
6. IFSC essential: Ensure correct code for successful transfer
7. Verify details: Double-check before every transfer

Disclaimer

This article is for educational purposes only. Transfer limits and charges vary by bank and may change. Always verify current terms with your bank before transferring funds.

Frequently Asked Questions

Q: Which is faster—NEFT or RTGS? A: RTGS is instant (seconds). NEFT takes up to 30 minutes.

Q: Is NEFT free? A: Online NEFT is free at most banks. Branch NEFT may have small charges.

Q: What’s the minimum for RTGS? A: ₹2,00,000. For smaller amounts, use NEFT or IMPS.

Q: Does IMPS work on holidays? A: Yes, IMPS works 24x7x365 including all holidays.

Q: Why use NEFT when UPI is free and instant? A: UPI has ₹1 lakh limit. For larger amounts (₹1 lakh - ₹2 lakh), NEFT is better.

Q: Can NEFT/RTGS be done through mobile app? A: Yes, most banking apps support NEFT/RTGS transfers.

Q: What if I enter wrong account number? A: Money goes to wrong account. Recovery is difficult—always verify before sending.

In India’s digital payment landscape, understanding NEFT, RTGS, and IMPS is like knowing which road to take—each has its purpose, and choosing right saves time, money, and hassle.