While making money transactions, users remain confused about which mode of transferring money is best suited for them. Basically, the confusion remains between NEFT, RTGS and IMPS. Here we list of all the details related to these three payment modes/systems and what are the key differences between these three. This will help you choose the best payment mode/system for money transactions.
NEFT
What is National Electronic Funds Transfer (NEFT) system?
National Electronic Funds Transfer (NEFT) is a nation-wide centralised payment system owned and operated by the Reserve Bank of India (RBI).
NEFT offers the following advantages for funds transfer or receipt:
-Round the clock availability on all days of the year.
-Near-real-time funds transfer to the beneficiary account and settlement in a secure manner.
-Pan-India coverage through large network of branches of all types of banks.
-Positive confirmation to the remitter by SMS / e-mail on credit to beneficiary account.
– Penal interest provision for delay in credit or return of transactions.
-No levy of charges by RBI from banks.
-No charges to savings bank account customers for online NEFT transactions.
-Besides funds transfer, NEFT system can be used for a variety of transactions including payment of credit card dues to the card issuing banks, payment of loan EMI, inward foreign exchange remittances, etc.
RTGS
What does RTGS stand for?
-The acronym ‘RTGS’ stands for Real Time Gross Settlement, which can be explained as a system where there is continuous and real-time settlement of fund-transfers, individually on a transaction by transaction basis (without netting). ‘Real Time’ means the processing of instructions at the time they are received; ‘Gross Settlement’ means that the settlement of funds transfer instructions occurs individually.
What are the benefits of using RTGS?
Ans. RTGS offers many advantages over the other modes of funds transfer:
It is a safe and secure system for funds transfer.
RTGS transactions / transfers have no amount cap.
The system is available on all days when most bank branches are functioning, including Saturdays.
There is real time transfer of funds to the beneficiary account.
The remitter need not use a physical cheque or a demand draft.
The beneficiary need not visit a bank branch for depositing the paper instruments.
The beneficiary need not be apprehensive about loss / theft of physical instruments or the likelihood of fraudulent encashment thereof.
Remitter can initiate the remittances from his / her home / place of work using internet banking, if his / her bank offers such service.
The transaction charges have been capped by RBI.
The transaction has legal backing.
IMPS
What is IMPS?
IMPS is an innovative real time payment service that is available round the clock. This service is offered by National Payments Corporation of India (NPCI) that empowers customers to transfer money instantly through banks and RBI authorized Prepaid Payment Instrument Issuers (PPI) across India.
What are the benefits of IMPS?
-Instant
-Available 24 x7 (functional even on holidays)
-Safe and secure, easily accessible and cost effective
-Channel Independent can be initiated from Mobile/ Internet / ATM channels
-Debit & Credit Confirmation by SMS
