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Difference Between NEFT and RTGS

Electronic Transfer of Funds

With internet banking, transfer of funds between two bank accounts has become easier as compared to the erstwhile mode of money transfers through cheque payments or demand drafts. The two popularly used mode for transfer of funds are NEFT and RTGS. In spite of both being convenient mode for shuffling of funds between two accounts maintained with same bank or different banks, each have distinct features depending on the RBI guidelines and protocols between the banks.

NEFT

The acronym NEFT stands for national electronic funds transfer. The NEFT transfer is technically transfer of funds between two bank accounts maintained with same branch or different branches, which is processed in batches. The batches are processed from 8.30 in the morning till 6.30 in the evening from Monday to Friday and the on Saturday the cut off time is restricted to 12.30 p.m. itself. In NEFT transfer of funds, first the sender’s account is debited, then inter-bank protocols are followed and then the beneficiary account is credited. The charges for NEFT transfer is dependent on the amount transferred and not the timings of fund transfer.

RTGS

The acronym RTGS stands for Real time Gross settlement.  In this mode of electronic transfer of funds, the amount gets debited from one bank account and other is credit on real-time basis. There are little protocols to be followed between the banks. Once the sender’s account is debited, the receiving bank can credit the beneficiary account within 2 hours of such receipt. The timings for RTGS transfer is 9.00 a.m. to 4.30 on weekdays and till 1.30 p.m. on Saturdays. The charges for RTGS transfer of funds vary depending on the timing of funds transfer and the amount so transferred.

In both cases, the RBI guidelines are to be strictly adhered to and if funds are not transferred to beneficiary account, the amount has to be refunded within the prescribed time lines.

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