NEFT vs RTGS vs IMPS payment systems comparison: Charges, settlement time, limits and more

Wondering about the differences between NEFT vs RTGS vs IMPS? Let's understand these payment systems to make your money transfers easier

By: Forbes India

Published:
29/01/2024 05:52 PM

You need to transfer money in India and require it to be done seamlessly. NEFT, RTGS, and IMPS are three options that may come to mind. All three payment systems offer speed, convenience, and reliability, making your financial transactions efficient and smooth. This time, we understand how these different payment systems work and how the distinctions of NEFT vs RTGS vs IMPS shape up.

Features of payment systems

Payment systems come with various features that make money transactions smooth and secure. Let's delve into the key aspects that define how these systems work and cater to various user needs:

Real-time transaction processing: Payment systems typically offer real-time transaction processing, ensuring swift and instantaneous funds transfer between parties.
Security protocols: Robust security measures are integral to payment systems, including encryption, multi-factor authentication, and fraud detection mechanisms to safeguard sensitive financial information.
Interoperability: A key feature involves compatibility with various financial institutions, allowing seamless transactions between different banks and other financial entities.
Scalability: Payment systems are designed to handle a scalable volume of transactions, accommodating the growing demands of users without compromising efficiency.
Transaction tracking and confirmation: Users benefit from the ability to track and receive confirmation of their transactions, providing transparency and reassurance throughout the payment process.
Regulatory compliance: Adherence to regulatory standards and compliance with legal frameworks is a fundamental feature, ensuring the payment system operates within the guidelines set by relevant authorities.

NEFT vs RTGS vs IMPS: Explained

Now, let's dive deeper into the details and explore NEFT vs RTGS vs IMPS in particular so that you can navigate through these payment options with clarity:

NEFT (National Electronic Funds Transfer)

NEFT, or the National Electronic Funds Transfer system, allows individuals and businesses in India to electronically transfer funds from one bank account to another across the country. Transactions are processed in batches, with settlement occurring at set intervals throughout the day. The settlement of the first batch starts after 00:30 hours, while the last batch ends at 00:00 hours.

Notably, NEFT remains operational on weekends and bank holidays for online visitors. If you want to initiate a NEFT transaction by visiting your bank, the services would not be available on the second and fourth Saturdays of the month and Sundays. Further, transactions initiated on bank holidays are processed on the next working day.

RTGS (Real Time Gross Settlement)

RTGS, the Real Time Gross Settlement system, is a real-time electronic funds transfer system that facilitates high-value transactions with immediate settlement. Unlike NEFT, RTGS processes transactions one-to-one, ensuring that funds are settled individually and without delay.

Online RTGS transfers need Internet banking facilities enabled, while offline transfers can be done at RTGS-enabled bank branches. However, similar to NEFT, if you want to initiate an RTGS transfer at the bank physically, you can not do that on bank holidays.

IMPS (Immediate Payment Service)

IMPS, or Immediate Payment Service, is a mobile-based funds transfer system that enables users to make instant and 24/7 interbank electronic transfers in India. This system supports various transaction types, including person-to-person transfers, merchant payments, and even mobile recharges. IMPS has significantly promoted financial inclusion and empowered users with quick and accessible digital payment options.

IMPS remains operational on weekends and bank holidays as it is a mobile-based payment system.