What is NEFT and IMPS mode of money transfer and how are they different

There are numerous methods for transferring funds from one bank account to another. With the advancement in technology, online money transfer has become the most convenient way to transfer funds from one bank account to another. We use these modes of transfer without fully comprehending the differences between the two. Understand the differences between NEFT and IMPS.

National Electronic Fund Transfer (NEFT)?

NEFT is an electronic funds transfer system introduced and maintained by the RBI that assists with money transfers from your bank account to the beneficiary's account, regardless of whether it is in the same bank as yours or another bank. But both accounts must be NEFT-enabled. 

There are two-time windows for NEFT clearance:

Monday through Friday: NEFT fund transfers are available from 8 a.m. to 7 p.m.
Saturday: from 8 a.m. to 12 p.m.

You can send money using NEFT starting from Re 1. To encourage online banking, the RBI has set no maximum limit for NEFT. However, some banks have established an upper limit. You can visit your bank’s website for details.

Immediate Payment Service (IMPS)

The National Payments Corporation of India introduced IMPS, an interbank online fund transfer service (NPCI). It facilitates real-time transactions via various channels such as the Internet, ATMs, mobile phones, and SMS. IMPS is a cost-effective method of making payments or transferring funds between banks that is instant and secure. IMPS is less complicated than NEFT because it only requires a mobile number.

You can transfer a minimum of Rs 1 and a maximum of Rs. 2,00,000 using IMPS. However, there is a maximum limit of Rs 200,000 per transaction.

Which facility is better?

NEFT requires you to have the beneficiary information and the application process is a bit longer, compared to IMPS which can be done through an app on mobile, although you can make the transaction online as well. 

Banks charge fees and GST for both services. The amount of that fee varies depending on the amount sent, the type of bank account and the bank's rules. 

Choose these online modes of transfer if you want to transfer money fast and conveniently.