IBPS PO 2017 Banking Awareness : Difference Between NEFT & RTGS

 

Both NEFT and RTGS are very common methods of online transaction. This is also one of the important topics of banking awareness for IBPS exams. In this post we would be giving all the details about these online transaction methods.

 

What is NEFT ?

NEFT stands for National Electronic Fund Transfer. It is a payment system which facilitates one-to-one funds transfer from one financial institution to another. Using NEFT, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the system.

Under NEFT the settlement takes place in batches rather than individually. The batches are settled in hourly time slots.

 

What is RTGS ?

RTGS stands for Real Time Gross Settlement. As the name suggests, it enables money to move from one bank to another on a real time and gross basis. Since these fund settlements take place in the books of the Reserve Bank of India (RBI) these payments are final and irrevocable.

 

 

How are NEFT and RTGS different?

1. In how the money is transferred.

• In NEFT, money transfer takes place in batches, thus the process is comparatively slower.
• In RTGS, the gross amount is transferred. It is a quick way of money transfer.

2. In timings.

• NEFT transfer can take place from
  8:00am-6:30pm (On weekdays)
  8:00am-12:30pm(On Saturdays)
•  RTGS transfer can take place from
  9:00am-4:30pm(On weekdays)
  8:00am-1:30pm(On Saturdays)
   

3. In the amount transfer limits.

• In NEFT there’s no transfer limit : minimum or maximum
• In RTGS, there’s no maximum limit. However, minimum amount to be transferred should be at least 2 lakhs.

4. In fee/ price charged by the RBI

Fee/ price charged by the RBI

NEFT Up to 10,000 : Rs. 2.5   10,001 – 1 lakh : Rs. 5   1 – 2 lakhs : Rs. 15   Above 2 lakhs : Rs. 25

RTGS   Up to 2 – 5 lakhs : Rs. 25-30 Above 5 lakhs : Rs. 50-55

5. In what the method is beneficial for.

• NEFT is beneficial for small money transfers
• IMPS is beneficial for large money transfers

 

Hope this helps!

All the best.