UPI vs NEFT

• It is a fast, hassle-free and the cheapest way of money transfer, which you can do from anywhere and at anytime
• It requires just a single click authentication that involves only two factors
• It requires only the UPI ID for carrying out a transaction
• One does not need to share, store, or remember any sensitive information related to the account
• You can easily link all your accounts to this one ID on the UPI app
• With the UPI app, you need not carry cash. Even use of ATMs is not required to leave aside getting cheques encashed. Simply use the QR code scan to make online and offline purchases
• One can also get payments from clients through this app’s collect payment option
• It allows funds settlement in real-time
• Any complaints that you have can be raised directly from the UPI app

• This is a cost-effective mode of money transfer however, some minimal charges are involved
• Available 24×7 for 365 days, including holidays
• There is no need for any cheque or demand draft payments. One can simply make payments online using NEFT
• It reduces the threat of fraudulent encashment and theft. It is an extremely safe money transfer method
• There is no paperwork involved in NEFT. It can be carried out on your bank’s app or through internet banking
• There is quick confirmation of the transaction to both the parties via SMS
• It is a fast way to transfer funds even though it must be done during bank working hours only and there is a half an hour time involved in the money to get credited
• NEFT transactions can be made from anywhere and anytime

UPI has been integrated with the banking apps of many banks. To use UPI follow the steps given below –

• Go to play store to install the UPI app of any bank of your choice
• Use your mobile number to register
• Upon registration, a ‘virtual address’ is created and mapped with your mobile phone. This will be unique to your account
• To make transactions you need the unique ID of the recipient. It could be a firm, a delivery boy, a merchant, or a shopkeeper
• It is possible to pay as less as Rs 50 to someone. The upper limit is however restricted to Rs 1 lakh as mentioned above
• Payments can be made between friends, to merchants and even to delivery boys instead of doing cash on delivery
• UPI transfers are made instantly

NEFT can be activated for your bank account once you activate online banking facilities. For this, you need to speak to your bank officials. If you already have an account with the bank your documents will already be submitted and it will be a simple process. Once your internet banking is activated:

• Log into your Internet or mobile banking account
• Press the “Transfer Funds” tab and select the NEFT option
• Go to Add/ Manage Beneficiary and add the Beneficiary Details
• Enter all details related to beneficiary name, account number, and IFSC Code of the branch
• Select the account to which you want to transfer the funds from
• Submit your funds transfer request. You will get a transaction reference number
• Upon completion of the transfer, both you and the beneficiary will get an SMS alert for the same

Q.Can I use UPI to transfer money from one bank account to another just like NEFT?

Yes, UPI allows you to transfer money from one bank account to another. It is called push money mechanism or sending money. 

Q.What are UPI and NEFT?

UPI or Unified Payments Interface is a digital payment system which allows different bank accounts to use a single mobile application. It is a seamless platform which facilitates real-time money transfer with a UPI ID and PIN. On the other hand, NEFT or the National Electronic Funds Transfer facilitating electronic one to one fund transfers from any bank branch to any individual having an account with any other bank branch in the country.

Q.Which fund transfer is better UPI or NEFT?

Both platforms have some pros and cons. UPI facilitates instant transfer for free (currently). However, there is a capping of Rs. 1 Lakh per day transfer. NEFT, on the other hand, facilitates the electronic transfer of funds from any bank branch to any individual having an account with any other bank branch in the country. Also, there is no capping on NEFT transfers per day. But, its cost is higher than of UPI and it takes about 12 hours for one NEFT transfer.

Q.Can I transfer funds offline in NEFT and UPI?

Offline transfers are available for NEFT but not in case of UPI.

Q.What is the service timing for both NEFT and UPI?

Both UPI and NEFT transactions can be initiated at any time of the day i.e. 24×7 for 365 days.