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

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:

1. Real-time transaction processing: Payment systems typically offer real-time transaction processing, ensuring swift and instantaneous funds transfer between parties.
2. Security protocols: Robust security measures are integral to payment systems, including encryption, multi-factor authentication, and fraud detection mechanisms to safeguard sensitive financial information.
3. Interoperability: A key feature involves compatibility with various financial institutions, allowing seamless transactions between different banks and other financial entities.
4. Scalability: Payment systems are designed to handle a scalable volume of transactions, accommodating the growing demands of users without compromising efficiency.
5. 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.
6. 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.

NEFT vs RTGS vs IMPS

The table below compares the three aforementioned types of payment systems based on several factors for a final overview of NEFT vs RTGS vs IMPS.

Comparison Category	NEFT (National Electronic Funds Transfer)	RTGS (Real Time Gross Settlement)	IMPS (Immediate Payment Service)
Settlement Type	Half hourly batches	Real-time	Real-time
Speed of Settlement	2 hours (subject to batches and cut-off timings)	Immediately	Immediately
Minimum Transfer Limit	Rs. 1	Rs. 2 lakh	Rs. 1
Maximum Transfer Limit	No limit. However, the maximum amount for each transaction is limited to Rs. 50,000 for cash-based remittances between India and Nepal under the Indo-Nepal Remittance Facility Scheme.	No limit	Rs. 2 lakh
Service Timing	Available 365 days, 24×7	Available 365 days, 24×7	Available 365 days, 24x7
Transaction Charges	No charges for inward transactions and online processes.	No charges for inward and online transactions, but charges are applicable for outward transactions for the amount: - Rs.2 lakh – Rs.5 lakh: not exceeding Rs.25 - Above Rs.5 lakh: not exceeding Rs.50 GST is also applicable	Charges depend on the amount transferred along with service tax at 18%. The fees depend on the individual bank’s discretion.
Payment Options	Online and offline	Online and offline	Online
Processing Time	Slower	Faster	Faster

FAQs

What is cheaper, NEFT or RTGS?

NEFT transactions cost less than RTGS payments. Therefore, if speed is not a pressing issue and a relatively smaller amount is to be transferred, NEFT can be the better payment system. 

Is Google Pay NEFT or IMPS?

Google Pay or any other UPI (United Payments Interface) facilitated payment system is neither NEFT nor IMPS. They are instead UPI P2P (peer-to-peer) payment methods, and the maximum transfer limit in a day/week/month can vary based on your bank.