With the advent of communication technology, the methods to settle transactions have gone a complete revolution, enabling the customers to settle transactions in a much easier and faster way as compared to earlier times. From money orders to send money and cheques, the modes of transfer of money for various different purposes has gone an upside change.
Now NEFT, RTGS, and IMPS have opened up quite faster ways to transfer any amount of money from one branch of any bank to anywhere across the country. NEFT stands for National Electronic Fund Transfer whereas RTGS is the abbreviation of Real Time Gross Settlement.
Now with the coming of these advanced methods to transfer funds, you can easily settle your transaction without those cumbersome procedure. Now all you have to do is to visit the bank, fill a form about the particulars of amount and the account from which and into which the amount is to be transferred and you are done. Your transaction has taken place without a speck of fatigue.
If you have activated internet banking for your account, you don’t even have to go to the bank. Just visit the site of the bank, fill in the necessary particulars, and submit OTP and your transaction is over. The particulars required for transaction are the account number and the name of the account holder into which the fund is to be transferred, Bank IFSC code of the particular branch from where the account of receiver is opened and the One Time Password.
Through NEFT, there is not any lower limit for transaction. You can even make a transaction of Re 1 without any constraints on the upper limit. However, some banks have placed ceiling on the maximum amount you can transfer on a particular day. For example, the HDFC bank has restricted transaction of more than 2 lakhs on a day.
The mode of operation of NEFT is deferred net settlement that is the transactions are made in hourly batches. Till a particular cut off time, the software collects the requests for transaction and after that cut off time, it starts the process to make the transaction.
There are 11 batches for transfer on weekdays between 9 am to 7 pm whereas on Saturday, five batches are scheduled between 9 am and 1 pm. Any transaction started after one cut off time has to wait till the next cut off time and then the transaction would take place.
The RTGS system of transfer works in real time and on a gross basis. This works continuously, unlike NEFT which is proceeded in batches. Since the RTGS system works continuously, you don’t have to wait for any cut off time and the transactions take place in real time, thus being extremely fast.
In either cases, if the amount doesn’t reach its destination, the amount has to be returned by the beneficiary bank. In RTGS, this takes place quickly while during NEFT, it takes some additional 3-4 hour’s time. However the transaction rarely fails and so you don’t have to worry much.