The full form of NEFT is National Electronic Funds Transfer and it was started in November 2005. This system was started by the Reverse Bank of India to make transfers from one bank to another that are linked with NEFT.
It is an online money transfer method and is reliable. The RBI manages this system and maintains an appropriate transfer method for online transfers from bank to bank.
What is NEFT?
The objective to introduce NEFT was to establish an efficient electronic fund transfer system. Furthermore, it is a completely secure system that allows real-time fund transfer. This system is available 24/7 throughout the year.
Additionally, it is also used to transfer funds one way from India to Nepal. Any individual having a bank account can make transfers through NEFT using an online banking app.
Difference Between NEFT and RTGS
NEFT stands for National Electronic Funds Transfer while RTGS is the short form of Real-Time Gross Settlement and both services are for money transfer.
It is a settlement of funds that takes place in batches of half-hour. It is preferred for fund transfers that are not time concerned.
On the other hand, RTGS is used where instant transfers are to be made and the transfers are of large amounts. This system is useful where urgent transfers have to take place.
Difference Between IMPS and NEFT
IMPS stands for Immediate Payment Service which is available 24/7. It is a very quick service that you can avail yourself of even on bank holidays. The National Payments Corporation of India (NPCI) offers this service.
However, using IMPS you can transfer lower amounts up to 2 lakh in no time.
IMPS is a fast payment service that is mostly available online.
There are a few banks that provide the facility of NEFT. One of the main privileges is that this is the only service that comprises both NEFT and RIGS features.
However, both of the services i.e IMPS and NEFT are regulated by separate departments. IMPS is managed by NPCI while NEFT is managed by RBI.
IMPS is a quick service than NEFT. It is a little time-consuming when it comes to transferring funds. Immediate payment service offers the convenience of transferring funds with the help of banking service, mobile banking, or via UPI or ATM.
In contrast to this, NEFT only offers internet banking services with the banks that have linked to it. Both of the services provide easy access yet they have some limitations too.
It is used for transferring more significant amounts though it takes a little more time at the same time. But IMPS are for immediate payments therefore it only allows smaller amounts of transfer.
Unlike IMPS, NEFT also provides one-way cross-border fund transfer that is from India to Nepal.
Difference Between UPI and NEFT
Among many other available fund transfer services, UPI is the most preferred one. You can not deny the fact that NEFT plays a significant role when you have to transfer bigger amounts.
However, Unified Transfer Payments (UPI) is the cheapest and most hassle-free method when it comes to transferring funds. The service can be used at any time anywhere.
UPI works based on authentication that covers two factors. To transfer money an individual has to provide the UPI card which is the most important document to use it.
Furthermore, the person does not even have to remember any account details when transferring the money. He can simply scan the QR code through the UPI app.
After scanning he can transfer the money. While on the other hand, NEFT transactions are also completely secure and efficient.
The NEFT payments can be made 24/7 throughout the year and cost some minimal charges. The best thing about it is that it does not require any paperwork or cheque or drafts.
Moreover, it has less to zero chances of fraud since the system is completely secure therefore most people prefer using the process of NEFT transfer.
NEFT Process – How does it work?
Using the process of NEFT transfer is quite simple and quick. You just have to log in to your net banking and add the recipient as a beneficiary. Although it is important to make sure that the bank is linked.
How to Transfer Funds through NEFT?
Here are the simple steps that your can follow to transfer funds through NEFT:
- Log in to your banking account and click on “Transfer funds”
- From the options in the drop-down menu select NEFT
- Then add a beneficiary to the “Add Beneficiary list”
- Add the details of the beneficiary in the given fields such as bank account number, name, IFSC, etc
- Next up, click on “Add or Confirm”
- For the authentication, you will have to enter OTP from your mobile number
- It takes 24 hours to add the beneficiary
- Once the beneficiary is added you have to enter the amount that you want to transfer
- Click “Confirm” and your amount will be transferred
NEFT Transfer Limits
It doesn’t have any limitations you can transfer as big an amount as you want to. In addition, it does not provide limits for minimum or maximum amounts. However, while transferring through cash you have to make sure that the amount is at least Rs. 50,000.
NEFT Transaction Charges/Fees
The charges or fees for a transaction vary in various amounts. Therefore there are no fixed fees but you can view the following list for various money transfers.
- Less than or equal to Rs. 10,000: Rs. 2.5
- Between Rs. 10,000 and Rs. 1 Lakh: Rs. 5
- Between Rs. 1 Lakh and Rs. 2 Lakh: Rs. 15
- Equal to or more than Rs. 2 Lakh: Rs. 25
Advantages of NEFT
It is the most reliable and preferred money transfer service. It is the most secure money transfer method that people use most. Here are its benefits:
- It is a completely secure process of money transfer.
- Transactions only cost minimal charges/fees.
- This money transfer service is available 24/7 the whole year
- It assures the fraudulent transfer of money from one bank to the other
- You can make NEFT payments through the online app which means there is no paperwork involved
- It instantly sends confirmation messages to both sides that are sender and recipient
- This service takes a half-hour time to credit the amount
Summary
The full form of NEFT is National Electronic Funds Transfer, a service for transferring funds online. It is started by the Reverse Bank of India (RBI). Furthermore, it is the most secure and efficient way of transferring funds from bank to bank.
The best advantage is that it is available 24/7 which means you can avail of the service during the bank holidays too. It is the most preferred money transferring service according to the banking terms. Moreover, it has no limits and is mostly used for transferring bigger amounts.
NEFT FAQs
Q) What is NEFT transfer?
NEFT transfer is a money transferring service that was started by the Reverse Bank of India. The main objective of the service is to provide online money transfers at any time. It is a one-to-one payment that takes place within India.
Q) What is the UTR number in NEFT?
The UTR is a Unique Transaction Reference number that is provided for identifying any money transfer through one of the services except for banks.
Q) What is the maximum limit per transaction in NEFT?
There is no limit per transaction. You can pay any amount however it is mainly used for big amount transfers.
Q) What is the NEFT mandate?
LIC made it mandatory for all the policyholders to have one of the NEFT mandate forms in order to receive the money transfers made through NEFT.
Q) What is NEFT IFSC code?
Indian Financial System Code is an 11-digit alphanumeric code used to identify the bank branches linked to NEFT.
Q) What is NEFT SBI?
SBI is the State Bank of India that provides NEFT services for all clients through online methods/banking.
Q) What is the minimum amount for NEFT?
If you are paying through cash then you must at least transfer Rs. 50,000. Although there is no limit for NEFT payments.
