Big good news for savings accounts holders! Now, no charges on this service - Absolutely free!

In a big relief to banking customers, the Reserve Bank of India (RBI) has directed banks not to charge savings account holders for NEFT with effect from January 2020.

"In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems. Banks will be required, in turn, to pass these benefits to their customers. Instructions to banks in this regard will be issued within a week," the central bank said in a statement, as per an IANS report.

What is NEFT?

The National Electronic Funds Transfer (NEFT) is an electronic funds transfer system maintained by the RBI, to transfer funds from one bank account to another. Money transfer can be made by an individual or company to an individual or company's bank account with any bank that is a member of the NEFT scheme, according to the RBI .

The RBI said earlier that it had done away with charges on NEFT and RTGS transactions.

What is RTGS?

RTGS is meant for large-value instantaneous fund transfers while the NEFT is used for fund transfers up to Rs 2 lakh.