NEFT vs. RTGS — What's the Difference?
By Tayyaba Rehman — Published on December 20, 2023
NEFT and RTGS are both electronic fund transfer systems in India; NEFT settles funds in hourly batches, while RTGS settles in real-time.
Difference Between NEFT and RTGS
Table of Contents
ADVERTISEMENT
Key Differences
NEFT stands for National Electronic Funds Transfer, while RTGS stands for Real-Time Gross Settlement. Both are methods of transferring money between banks in India.
NEFT operates in hourly batches, meaning the money is transferred in specific time slots. On the other hand, RTGS is a real-time transfer system where transactions are processed as they are received.
NEFT is typically used for transferring smaller amounts of money that don't require immediate settlement. In contrast, RTGS is used for high-value transactions that need instant settlement.
The minimum transfer limit for NEFT is generally lower than RTGS. RTGS, being for significant amounts, has a higher minimum transfer threshold.
Both NEFT and RTGS are secure methods of fund transfer. However, since RTGS is a real-time settlement process, it offers quicker visibility and confirmation of the transfer.
ADVERTISEMENT
Comparison Chart
Full Form
National Electronic Funds Transfer
Real-Time Gross Settlement
Settlement Type
Hourly Batches
Real-time
Transfer Amount
Generally lower minimum limit
High-value transactions only
Transaction Speed
May take a few hours due to batch processing
Immediate, within minutes
Usage
Ideal for regular and smaller transactions
Ideal for urgent and high-value transactions
Compare with Definitions
NEFT
NEFT is suitable for transferring smaller amounts.
For such a small amount, using NEFT would be more appropriate.
RTGS
RTGS is an electronic payment system for large-value transactions.
For this bulk purchase, we should consider doing an RTGS transfer.
NEFT
NEFT operates in hourly cycles throughout the day.
I missed the current NEFT cycle, but I'll ensure the transfer is done in the next one.
RTGS
RTGS transactions are settled instantly.
As soon as you initiate an RTGS, the recipient's account will be credited.
NEFT
NEFT is an electronic way to transfer funds between banks.
Can you provide your bank details? I prefer using NEFT for transactions.
RTGS
RTGS is also managed by the Reserve Bank of India.
Given that RTGS is overseen by the Reserve Bank of India, it's a reliable method.
NEFT
NEFT is managed by the Reserve Bank of India.
The safety of NEFT transactions is ensured since it's regulated by the Reserve Bank of India.
RTGS
RTGS facilitates real-time fund transfers.
If you need the money urgently, I can send it via RTGS.
NEFT
NEFT is a batch-based funds transfer system.
I'll send you the payment through NEFT in the next batch.
RTGS
RTGS has a higher minimum transfer limit compared to other methods.
Since it's a significant amount, you'll need to use RTGS for this transfer.
Common Curiosities
How does RTGS differ from NEFT?
RTGS facilitates real-time fund transfers, while NEFT operates in hourly batches.
Can I use NEFT for small amounts?
Yes, NEFT is suitable for transferring both small and moderate amounts.
How fast is an RTGS transfer?
RTGS transactions are settled instantly, in real-time.
What does NEFT stand for?
NEFT stands for National Electronic Funds Transfer.
When can I use NEFT services?
NEFT services are typically available throughout the day, but there may be cut-off times depending on the bank.
Is RTGS secure?
Yes, RTGS, managed by the Reserve Bank of India, is a secure method for fund transfer.
Do both NEFT and RTGS work internationally?
NEFT and RTGS are primarily for domestic fund transfers in India, but some banks may offer NEFT for international transfers.
Is there a minimum transfer limit for NEFT?
Yes, but it's generally lower than the limit for RTGS.
Are there charges for using NEFT or RTGS?
Both NEFT and RTGS might have associated charges, which vary by bank.
Is NEFT available on weekends?
The availability of NEFT on weekends depends on individual bank policies and the Reserve Bank of India's directives.
Why would I use RTGS over NEFT?
RTGS is ideal for high-value transactions that require immediate settlement.
How long does an NEFT transfer take?
NEFT might take a few hours due to its batch processing nature.
Is there a maximum limit for NEFT transfers?
While there is no set maximum limit for NEFT, individual banks might have their own limits.
Can I schedule an RTGS transfer for a future date?
Typically, RTGS transactions are real-time and immediate, but some banks might offer scheduling options.
What's the main advantage of RTGS?
The main advantage of RTGS is its real-time and immediate fund transfer capability.
Share Your Discovery
Previous Comparison
Heavy Water vs. Normal Water
Next Comparison
Like vs. Such AsAuthor Spotlight
Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
