NEFT vs RTGS: A Detailed Comparison Explained

Updated on: 6 Dec 2024

By knowing the difference between NEFT and RTGS, you can decide which option is right for you, depending on the urgency and limit. Since the introduction of digital modes of fund transfers, these options have gradually replaced traditional methods like cheques and demand drafts.

RTGS and NEFT are among the most popular online transfer options, as you can make payments instantly or in a few hours at the most. However, both have different limits and conditions, which you must know to help you choose the right option at the right time.

Read on to learn more about RTGS and NEFT and their differences.

What are RTGS and NEFT?

RTGS stands for Real-Time Gross Settlement, while NEFT’s full form is National Electronics Funds Transfer. Both are digital fund transfer options that allow you to send money from one bank account to another across the country.

With NEFT, you can send funds from one bank branch to another through online transfers. However, ensure that the receiver has NEFT enabled to their account, or the fund transfer will fail. Likewise, RTGS is suitable for making high-amount transactions via online and offline modes.

Also Read: How Net Banking Can Save Time?

Difference between NEFT and RTGS

Here are some crucial points of difference between NEFT and RTGS you should know:

Timings

When mentioning RTGS and NEFT fund transfer options, the first difference you must know is the time taken. With both options, you can transfer money within a day. If you choose NEFT, your fund transfer will get settled within 23 half-hourly batches. However, with RTGS, you can opt for real-time settlement without any waiting period.

Minimum and Maximum Limit

The minimum limit for NEFT is ₹1 without any upper limit, so you can transfer funds of any amount you want. However, for RTGS, the minimum transfer amount is ₹2 lakhs and there’s no maximum limit.

Settlement Speed

The time taken for a fund transfer or settlement is another key factor when it comes to deciding between RTGS and NEFT. NEFT takes a minimum of 30 minutes to fund a transfer since it generally takes some time to add a beneficiary to your account.

However, RTGS, as the name suggests, offers real-time fund settlement and credits the beneficiary’s account within 30 minutes.

Charges

Another key difference between RTGS and NEFT is the additional charges applied. While you don’t have to pay any fees for inward transactions, the charges for outward transactions are different for both of them.

For NEFT, the following charges will apply as per your transaction amount

Limit	Charge
up to ₹10,000	₹2.50 + taxes
₹10,000 – ₹1 lakh	₹5 + taxes
₹1 lakh – ₹2 lakhs	₹15 + taxes
Above ₹2 lakhs	₹25 + taxes

Here are the charges for outward transactions in RTGS:

Limit	Charge
₹2 lakhs – ₹5 lakhs	₹25 + taxes
Above ₹ 5 lakhs	₹50 + taxes

Which is Better: NEFT or RTGS?

With the above difference between NEFT and RTGS, it is clear that both options have their benefits and drawbacks. For instance, the minimum limit for NEFT transfer is ₹1, and it can take up to 2 hours to process. On the other hand, RTGS is only possible for amounts beyond ₹2 Lakhs, but the transfer happens immediately.

Considering this, you can choose between the two options based on your requirements. So, if you need to make a fund transfer for a substantial amount immediately, you can choose RTGS. Similarly, to make a small transaction without any urgency, you can opt for NEFT.

Once you clearly understand the difference between NEFT and RTGS, you can make seamless payments with your preferred fund transfer mode. It is important to note that both of these options allow transparent and secure fund transfers quicker than offline modes.

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FAQs on NEFT and RTGS

Which is best among RTGS and NEFT?

Deciding which is better, NEFT or RTGS depends on your requirements. You can consider the limits, charges and time taken to choose an option that best suits your needs.

Why is RTGS faster than NEFT?

RTGS doesn’t follow any specific processing method and each transaction is processed as the request is made, unlike NEFT. Therefore, it is a faster option.

Which is cheaper, NEFT or RTGS?

The cheaper option between these two depends on your transfer amount. The charges for NEFT begin at ₹2.50, plus taxes and go up to ₹25, plus taxes for amounts above ₹2 laks. On the other hand, RTGS charges start at ₹25, plus taxes for amounts above ₹2 lakhs, and go up to ₹50, plus taxes for transfers of ₹50 lakhs and above.