Money transfer: NEFT vs RTGS - Comparison of charges, limit and more

With a host of modes available to transfer cash, generally one gets confused to which is a better platform. These days, everyone desires the cash transaction to be followed within minutes. However, this was not the case back in 2000s. In those periods, every individual would have to follow a very systematic form of transferring money. Visit your bank, fill out a form with details like bank account number, name, cheque details or denomination details and signature. It was a lengthy and time-consuming process. However, over a decade things have changed and one would agree that the  most traditional form of transferring money anywhere were National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS). These two services are offered by every state-owned and private banks. The only common ground between these two portals are that they are followed digitally and can help in carrying out cash transaction online without the need of visiting of bank branches. However, they are still very different from each other and are packed with various cash limit, transaction charges and features. Let’s find out, which is better!

NEFT:

Being launched since 2005, this platform is a nation-wide payment system. Here, any customer can transfer funds electronically from any bank branches to other individuals who are having similar bank account or other banks as well. The transactions in this platform are settled in batches and have different timings. This means, any transfer made after a specified batch time, the customer will have to wait till next designated schedule for successful transactions. 

One can carry an NEFT transaction both offline and online. To carry NEFT at bank branch, you will have to visit and submit details of the transaction in a piece of paper given by the lender. If the account is within the same bank, the time period for completion of the transaction is generally on the same day in few hours. If transfer is done in other bank account, then time taken can be a whole day or even may take upto 2 days. 

In regards to online mode, you will have to add payee details either be same or other bank account. After adding payee, one has to wait at least 30 minutes to carry the transactions. 

RTGS:

Somewhat similar to NEFT, RTGS can also be carried online. Here, the fund is transferred from one bank to another in real-time and gross basis as the name suggest. Unlike NEFT, the RTGS is much faster possible way of transferring hefty amount, as real time indicates transaction carried aren’t subject to any waiting period. Also, gross settlement means that, a transfer of money is fulfilled on a one-on-one basis without collecting with another transaction. 

Completion of the transaction can be witnessed as soon as the processing is done. Transactions in this platform are seen as final and irrevocable as they account occurs in the books and maintained by RBI. One can carry RTGS during working hours of a bank. 

Which is better?

Maximum limit - For instance at HDFC Bank, in RTGS, a minimum Rs 2 lakh transaction can be carried. Generally, there are no upper limit in RTGS transactions carried at bank branches, however, if done electronically then Rs 25 lakh at maximum can be transfer per day.

Unlike HDFC Bank, the state-owned lender SBI has a different way of RTGS transaction. For instance a SBI customer can carry RTGS of Rs 2 lakhs to Rs 5 lakhs and above in inter-bank in three different batches and all of them have transaction charges depending upon the time you decide to carry money transfer. 

Also, if you are carrying much higher value, then a bank may ask for a written letter in advance. Hence, check with your bank norms for RTGS at branches. 

Similar to RTGS, HDFC Bank allows Rs 25 lakh per day via online and without any limit if carried via bank branches. Transaction timings for both here are between 8 am to 6.30 pm from Monday to Saturday except 2nd and 4th Saturdays of every month as banks across India have holiday. 

There are no minimum limit at SBI for NEFT, however, maximum Rs 10 lakh can be transferred. 

Transaction charges - In regards to NEFT, both SBI and HDFC Bank levies Rs 2.50 plus GST for transactions upto Rs 10,000.  While above Rs 10,000 upto Rs 1 lakh - Rs 5 plus GST is applicable. Further above Rs 1 lakh to Rs 2 lakhs - a Rs 15 plus GST is charged. However, in case of above Rs 2 lakh to Rs 10 lakhs, SBI levies Rs 25 plus GST and same is applicable in HDFC Bank but upto Rs 25 lakh limit. 

The RTGS transaction charges are different in SBI. Find out!

While one can carry RTGS transaction above Rs 2 lakhs to Rs 5 lakh at HDFC Bank, at a cost of Rs 25 plus GST. Amount if above Rs 5 lakhs - charge of Rs 50 plus GST is levied from this bank. 

Hence, it is clear both RTGS and NEFT transaction limit differs from bank wise. However, charges are much higher in RTGS than compared to NEFT.

Data reveals a lot! 

According to RBI's data, transaction carried via NEFT and RTGS has been mixed in FY19.

From April 2018 - March 2019, NEFT transactions stood over 2,318.89 million in volume terms worth nearly Rs 227.93 lakh crore. Majority of transaction was witnessed in March 2019 alone with 242.38 million transaction in volumes aggregating over Rs 25.40 lakh crore. 

On the other hand, RTGS transaction came in at 136.63 million in volume terms worth Rs 1,715.52 lakh crore in FY19.  Because of fiscal year end, March 2019 saw highest transaction with 13.64 million in volume terms worth Rs 190.69 lakh crore.