NEFT vs RTGS: A Comparative Analysis Between the Two Options

NEFT vs RTGS: A Comparative Analysis Between the Two Options
NEFT vs RTGS: A Comparative Analysis Between the Two Options

With the initiation of online payment modes and enhanced technical usage amongst the users, instantly transferring the funds from one financial institution to another has become very easy. Users can select any one of the numerous payment modes based on the amount that requires being transferred, time duration, i.e., by when the amount must be credited to the bank account of the receiver etc. 

RTGS and NEFT are 2 of the major methods of fund transfer that are available to users. Both methods have their benefits & drawbacks and are suitable for all the users based on the requirement. The blog concentrates on the distinction between the NEFT and RTGS modes of fund transfer to explain to you which one is a better choice. 

Understand NEFT (National Electronic Funds Transfer)

Regulated by RBI (Reserve Bank of India), National Electronic Funds Transfer (NEFT) is an electronic option for transferring money online. Most of the Indian banks offer NEFT features on mobile banking and internet banking. Money transfer through the NEFT mode does not need any additional transaction expenses. Transactions through the NEFT get processed in a separate batch. The RBI has mentioned a cut off under which such transactions are settled. 

✔  NEFT is a 1 to 1 payment facility. 

✔  Transactions of NEFT may be processed just between the banks that provide NEFT enabled services. 

✔  Transactions via the NEFT do not happen on a real-time basis, implying it takes just a few days for the NEFT transactions to finish. 

Before 2019 end, RBI had fixed a timing during which the NEFT transactions could be processed. As per the regulations, NEFT transactions could be processed just from 8 AM to 6:30 PM between Monday and Friday and between 8 AM and 12 PM on Saturdays. However, from the year 2020 onwards, NEFT transactions could be conducted 24 X 7. 

For transferring the fund via NEFT, you should add a beneficiary on the net banking portal of the required bank. 

✔  There are zero limits on the NEFT transaction amount.

✔  There is a cost applicable on NEFT transactions; the amount differs between Rs 2.50 and Rs 25 based on the transferred amount. 

✔  Based on the RBI guidelines, payment through the NEFT is processed as well as settled in half-hour batches. 

Understand what is RTGS – real-time gross settlement

RTGS, also called a real-time gross settlement, is a method where your money gets transferred from one account to another in real-time, without any delay. RTGS work out as the best payment method if you require transferring an amount equivalent to over Rs 2 lakh on a real-time basis. Unlike NEFT mode, RTGS does not follow a specific processing method; hence the funds are settled in real-time with zero delays. Via RTGS, the transactions are processed with instruction, which makes the money transfer procedure faster and easier.  

✔  RTGS facility in India can be accessed at any time, on any day of the year.

✔  Transactions via RTGS get processed on 1 to 1 basis.

✔  RTGS method is used mostly for transactions of high value. 

✔  RTGS service can be utilized both offline and online modes.

✔  For processing the transactions via RTGS, the following details should be provided: 

✔  Amount you want to transfer

✔  Bank account number

✔  Bank’s branch

✔  Beneficiary’s name

✔  Beneficiary’s IFSC

✔  Beneficiary’s bank branch

✔  Distinction between RTGS vs NEFT

Listed below are the key difference between the RTGS and NEFT modes: 

Distinction pointsRTGSNEFT
Minimum amount to be transferredRs 2 lakhRe 1
The maximum amount that you can transferNo limitNo limit
Kind of settlementAmount settled 1 to 1Amount settled in batches
Settlement timeImmediate2 hours
Transfer modeOnline & offline, bothOnline & offline, both
Transfer timingsDiffers from one bank to another24 X 7, all 365 days
Additional chargesRs 30 on the outward transactions from Rs 2 lakh to Rs 5 lakh and Rs 55 on the outward transaction of over Rs 5 lakhZero charges applicable

Transaction charges: NEFT vs RTGS 

Additional NEFT transaction charges

NEFT transaction included the listed additional charges till December 2020

Transaction amountCharges
Below or equal to Rs 10,000Rs 2.5
From Rs 10,000 to Rs 1 lakhRs 5
From Rs 1 lakh – Rs 2 lakhRs 15
Equal to or over Rs 2 lakhRs 25

However, from 2021 onwards, the Reserve Bank of India has removed all applicable charges on online NEFT transactions. The initiative was adopted to promote digital transactions. RBI has mentioned that with effect from 1st January 2020, banks shall not incur any charges from your savings holder on online transfers performed via NEFT. 

Additional charges on the RTGS transactions:

Following fees are charged on transactions via RTGS – 

Transaction typeCharges applicable
Inward transactionsZero charges
Outward transactions (amount of more than 5 lakh)Rs 55
Outward transactions (amount of between Rs 2 lakh and Rs 5 lakh)Rs 30
Online transactions (mobile/internet banking)Zero charges

RTGS vs NEFT: Which one is better?

By going through the above-listed distinctions, it must be evident that RTGS and NEFT are 2 majorly distinct fund transfer modes. While NEFT comes with zero minimum or maximum limit on the amount that can be transferred, RTGS transactions can just be conducted if the amount that is to be transferred is more or equal to Rs 2 lakh. Likewise, NEFT transactions take nearly 2 hours for processing while RTGS transactions get processed instantly. Thus, you can select any of the payment options based on your requirements as listed below:  

✔  You can choose the NEFT mode of fund transfer if you want to transfer a small amount & there are zero urgencies for completing the transaction. 

✔  Alternatively, in case you want to transfer a massive amount of funds on an instant basis, then RTGS must be the preferred transfer mode. 


Regardless of whichever method you select, it is crucial to remember that both methods are secure and safe and are backed by the RBI (Reserve Bank of India). Both the methods, RTGS and NEFT, are reliable modes of payment that support digital, cashless initiatives in forming an advanced economy.

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