National Electronic Funds Transfer or NEFT is a nationwide payments system that allows transfer of funds from one bank’s account to another. With an increased focus on online banking, NEFT has become one of the most popular ways of transferring funds. Since it can electronically transfer funds from any bank account to another, one need not visit the bank branch to transfer funds through NEFT.
How are NEFT Transactions Carried Out
NEFT is not an instantaneous process and fund transfer requests are processed in batches. Let us discuss the steps involved in the process of NEFT:
Step 1: An individual who wants to transfer funds will have to fill out an application form by providing details of the beneficiary such as the name of the beneficiary, the name of the bank’s branch where the beneficiary has an account, IFSC of the branch, account type and number.
Step 2: The originating bank branch collects the data and sends a message to the NEFT service centre.
Step 3: The NEFT service centre then forwards the message to the NEFT clearing centre to be included in the next available batch.
Step 4: The clearing centre now sorts fund transfer transactions destination bank-wise and then prepares to account entries to receive funds from the originating bank and route the funds to the beneficiary’s bank.
Step 5: The destination bank by this point receives the inward remittance messages from the clearing centre and processes the credit to the beneficiary customer’s account.
NEFT transactions are available 24×7 and 365 days on all days of the year. Earlier, NEFT transactions were available from 8:00 AM to 6:30 PM from Monday to Friday only. However, RBI has regularised that NEFT transactions will be available on all days of the year, including holidays.
Also, after usual banking hours, NEFT transactions are expected to be automated transactions initiated using ‘Straight Through Processing (STP)’ modes by the banks.
How to Transfer Funds through NEFT Online
Below are the steps to know how to transfer funds through NEFT online:
- Log in to your net banking account
- Click on the ‘Fund transfer’ option on the main page
- From the drop-down menu select ‘NEFT’
- After selecting, you need to add the beneficiary to your account if you haven’t already
- To add a new beneficiary, click on the ‘Add beneficiary’ option displayed on the page
- Now, enter the beneficiary’s details such as the name of the beneficiary, account number, IFSC, etc.
- Tap on ‘Confirm’ or ‘Add’
- An OTP will be sent to your registered mobile number to authenticate
- Post authentication, the action will be processed and it will take up to 24 hours to add the beneficiary
- Once the beneficiary is added, you need to select the beneficiary you need to send the money from your list of beneficiaries
- Now, enter the amount that needs to be transferred and confirm your transaction
- Once you confirm, the amount will be transferred from your bank account to the beneficiary’s account
How to Transfer Funds through NEFT Offline
For the offline NEFT process, you have to fill an NEFT form in your bank’s branch. All the necessary details are filled in the form which is later handed over to the banking official. Let us discuss the details further:
- At the time of processing offline NEFT transactions, the remitter needs to mention his details along with the beneficiary’s details at the time of filling the form.
- The required details are account number, account name, IFSC Code, branch name, bank name, and account type of both persons.
- If the transaction exceeds Rs. 50,000, the remitter will have to provide his/her PAN card at the time of commencing the transaction
Major Banks Providing NEFT Facility
|Axis Bank Limited||AU Small Finance Bank||Bank of Baroda|
|Bank of India||Bank of Maharashtra||Bandhan Bank Limited|
|Canara Bank||Central Bank of India||City Union Bank Limited|
|DCB Bank Limited||DBS Bank Limited||Equitas Small Finance Bank|
|Federal Bank Limited||HSBC Limited||HDFC Bank Limited|
|Indian Bank||Indian Overseas Bank||ICICI Bank Limited|
|IDBI Bank Limited||IDFC First Bank Limited||IndusInd Bank Limited|
|Kotak Mahindra Bank||Punjab National Bank||RBL Bank Limited|
|State Bank of India||Standard Chartered Bank||UCO Bank|
|Union Bank||Utkarsh Small Finance Bank||Yes Bank Limited|
How to Track NEFT Transaction Status
- The remitter and the beneficiary can track the status of the NEFT transaction by contacting the NEFT Customer Facilitation Centre of their respective bank.
- The customer can find the details of the NEFT CFC of banks on the website of their respective bank.
- If the customer wants to track the transaction fast, the customer needs to provide a few details related to the transaction such as Unique Transaction Reference (UTR) number/transaction reference number, date of transaction, etc. to the respective bank.
Who can make NEFT Transactions
- NEFT facility can be used by both account holders and non-account holders in a bank
- A person who does not own a bank account can do NEFT by depositing cash at the nearest NEFT branch of any bank by providing details such as a complete address, phone number, etc.
- Non-account holder is restricted to doing transactions of Rs. 50,000 per transaction
What is NEFT Transfer Limit
There is no transfer limit of fund transfer via NEFT by RBI. However, banks might impose some limits on their risk perception with the approval of their board.
Prerequisites for NEFT Transfer
There are a few prerequisites that have to be fulfilled for NEFT fund transfer. Some of them are mentioned below:
- To be able to use the NEFT mode of payment or transfer, the beneficiary needs to have a savings or current bank account
- If you do not have a bank account, you can still proceed with NEFT
- You would need to visit a bank that is a part of the NEFT network and proceed with transfers
- The only issue is that such remittance is restricted at RS. 50,000 per transaction
- People using netbanking or mobile banking can do NEFT fund transfer online as well
Essential Beneficiary’s Details required for NEFT Fund Transfer
- Beneficiary’s Name
- Branch Name
- Bank Name
- Account Type
- Account Number
- Branch IFSC
Chances of Failure of NEFT Fund Transfers
NEFT fund transfer may rarely fail due to some technical glitch that may happen at the time of a heavy load of payments. Should the event arise where the transaction fails, the customer can reach out to their respective bank as all the transactions are recorded on the website as well as RBI. Ideally, the deducted amount from the remitter’s account is refunded back but if you do not receive funds in your account within three days of a failed transaction, you can file a complaint by calling the bank customer care team.
What are the Charges Applicable for NEFT Transactions
For individuals who are on the receiving end of the transfer, there are no charges whatsoever. Moreover, no NEFT charges are applied to transactions initiated online via the internet or mobile banking channels. However, if you are the one who is initiating the fund transfer, you would have to pay certain fees to facilitate the same.
- Maximum of Rs. 2.50 (+ GST) for transfers up to Rs. 10,000.
- Maximum of Rs. 5 (+ GST) for transfers above Rs. 10,000 and less than Rs. 1 Lakh.
- Maximum of Rs. 15 (+ GST) for transfers above Rs. 1 Lakh and less than Rs. 2 Lakh
- Maximum of Rs. 25 (+ GST) for transfers above Rs. 2 Lakh.
The charges for NEFT vary from bank to bank and you should check with your bank regarding the same. While some banks charge transfers up to Rs. 10,000 at flat Rs. 2.5, others charge Rs. 2.5 along with taxes. Depending on your account type, some banks might have free NEFT transfers within the same bank, adding much more convenience.
Benefits of Using NEFT
Let us know about the advantages offered by NEFT:
- NEFT is available round the clock i.e., 24×7 and 365 days
- Safe and secure fund transfer
- There are no charges levied by RBI from banks
- NEFT service can be used for a variety of transactions such as payment of credit card bills, payment of loan EMI, etc.
- The service is available Pan-India
- No charges levied on savings bank account customers for online NEFT transactions
- The process of NEFT can be initiated from your phone or the comfort of your home via net banking or mobile banking
- When the beneficiary receives money then the remitter receives credit confirmation via SMS or email
- It is a cost-effective mode of fund transfer
Difference between NEFT, UPI, and RTGS
Given below is a detailed comparison between NEFT, UPI, and RTGS:
|Minimum Transfer Value||Rs. 1||Rs. 1||Rs. 2 lakh|
|Payment Option||Online and Offline||Online||Online and Offline|
|Maximum Transfer Value||No limit||Rs. 2 lakh||No limit|
|Transfer Time||Up to 30 minutes||Immediate||Immediate|
|Service Time||Available 24×7||Available 24×7||Available 24×7|
|Inward Transaction Charges||No charges||No charges||No charges|
|Details Required||Account No. and IFSC Code||VPA of beneficiary/QR code/Account No. and IFSC||Account No. and IFSC Code|