Difference Between NEFT, RTGS and IMPS

India currently has various methods to transfer money online such as digital wallets, UPI, and more. However, the most commonly used online fund transfer method has been:

• National Electronic Funds Transfer (NEFT)
• Real-Time Gross Settlement (RTGS)
• Immediate Mobile Payment Service (IMPS)

While NEFT and RTGS were introduced by RBI (Reserve Bank of India), IMPS was introduced by National Payments Corporation of India (NPCI). Read further to learn more about these three payment systems.

NEFT

National Electronic Funds Transfer (NEFT) is a payment system that facilitates one-to-one funds transfer. Using NEFT, people can electronically transfer money from any bank branch to a person holding an account with any other bank branch, which is participating in the payment system. Fund transfers through the NEFT system do not occur in real-time basis and the fund transfer settles in 23 half-hourly batches.

RTGS

Real-Time Gross Settlement (RTGS) is another payment system in which the money is credited in the beneficiary’s account in real-time and on a gross basis. The RTGS system is primarily meant for large value transactions that require and receive immediate clearing.

IMPS

Immediate Mobile Payment Services(IMPS) is a real-time instant inter-bank funds transfer system managed by National payment corporation of India. IMPS is available 24/7 throughout the year including bank holidays, unlike NEFT and RTGS.

NEFT, RTGS and IMPS payment systems were introduced to offer convenience and flexibility to the account holders. To use these online fund transfer services, the remitter must have the basic bank account details of the beneficiary. The bank account details include the beneficiary’s name and bank’s IFSC. Though all three payment systems are used for funds transfer, they exhibit a few differences.

Before learning their differences, let’s first learn some basic terms revolving around payment systems. These terms will help in understanding the difference between different payment systems better.

• Fund Transfer Limit

The maximum and minimum amount of money allowed for transfer by each payment system may differ. Therefore, fund transfer value is an important factor in determining which fund transfer method will be appropriate for a customer.

• Service Availability

Some payment systems are available for 24*7 while others have specific timings. Payment systems that are available 24*7 allow remitters to initiate money transfers anytime and any day. However, the funds will settle only when the service is available.

• Fund Settlement Speed

Different fund payment systems have different fund settlement speeds. Fund settlement speed here is the total time consumed to settle money from one account to another after the transfer has been initiated.

• Fund Transfer Charges

Transferring money involves charges. As per RBI, fund transfer charges for each payment system are decided by banks. The amount charged is based on the amount to be transferred, transfer speed, and other features offered by the bank.

Although there are various other important terms, these are the few basics that will help you understand the difference between NEFT, RTGS, and IMPS.