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Difference between RTGS and NEFT

Key Differences Between NEFT & RTGS

The current era of digitalization has brought two popular electronic payment systems to light: National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS)

Since both, NEFT and RTGS, have been around for quite some time, many people often struggle to make a choice between them.

In this article, we will help you understand what is NEFT and RTGS, followed by the differences between NEFT and RTGS in detail below:

What is National Electronic Funds Transfer (NEFT)?

The Reserve Bank of India (RBI) launched an electronic method of transferring money called NEFT in 2005. Ever since its introduction, this NEFT-enabled facility has become popular in India. It is mainly due to its attractive features, some of which include the following:

  • One-to-one payment
  • 24×7 availability
  • No transaction limits
  • Quick transfer, etc.

With these features, the NEFT facility enables you to transfer money from your bank account to another person’s account, irrespective of it being in a different bank.

So, send and receive funds through NEFT with these steps mentioned below:

  • Visit our official Airtel Payments Bank website
  • Enter the customer ID and password to login into your account
  • Choose ‘Fund Transfer’ from the ‘Payments & Transfer’ section
  • Select the NEFT transfer option
  • Add the beneficiary details
  • Enter the transfer amount and description
  • Accept the terms and conditions
  • Complete the entire process by clicking ‘Confirm’

Now that you have an idea about what NEFT means, let us help you to understand the meaning of RTGS:

As the name suggests, Real Time Gross Settlement (RTGS) is a payment mode that occurs in real-time on a gross basis. Thus, it is mainly used for transferring a huge amount that requires an immediate clearance.

Under RTGS, you can make the transfer keeping the following features in mind:

  • High-value transactions
  • One-to-one basis
  • Online and offline modes

Now, since you know both the concepts, let’s proceed further to understand the clear differences between NEFT and RTGS:

Difference between RTGS and NEFT:

Differentiation Factors

National Electronic Funds Transfer (NEFT)

Real Time Gross Settlement (RTGS)

Minimum Transaction Amount Nil Rs. 2,00,000
Maximum Transaction Amount Nil Nil
Settlement Type Settlement in hourly batches One-on-one settlement
Settlement Timings Two hours Instant
Mode of Transfer Online and offline mode Online and offline mode
Transfer Timings 24x 7 Varies from one bank to another

Besides the above-mentioned factors, RTGS and NEFT also differ from one another in terms of their applicable charges on online transactions.

When it comes to NEFT, there are zero charges. Why? Well, the RBI commanded the banks to withdraw all the earlier charges imposed on the NEFT transaction in January 2021. Thus, none of you have to pay any fees on NEFT fund transfers.

RTGS, on the other hand, levies additional charges (as mentioned below) on their online transactions:

Transaction Type

Additional Fees

Internet and mobile transactions No charge
Inward transactions No charge
Outward transaction amount ranging between Rs. 2 Lakhs and 5 Lakhs Rs. 30
Outwards transaction amount above Rs. 5 Lakhs Rs. 55

These above-mentioned factors clearly indicate massive differences between NEFT and RTGS.

While NEFT does not have any minimum or maximum transaction limit, RTGS transactions require Rs. 2 Lakh for an electronic transfer. On the other hand, the time taken for an NEFT transfer is two hours, while RTGS transactions are authorized instantly.

So, if you’re looking forward to choosing between these two, make a final decision based on your needs as mentioned below:

  • Choose NEFT transfer only if you are willing to wait for up to 2 hours for the payment authorization.
  • Go for RTGS if you’re keen on making a huge money transfer on an immediate basis.

All in all, choosing between NEFT and RTGS can be a tad overwhelming. Thus, it is important to first analyze the difference between them, understand your needs, and make the final choice accordingly

So, if you’re looking forward to transferring a huge amount like Rs. 1 Lakh instantly, download BHIM UPI app of Airtel that provides a quick money transfer solution.