InvestorQ : What is NEFT and how is it different from RTGS?
Crowny Pinto made post

What is NEFT and how is it different from RTGS?

Answer
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Aashna Tripathi answered.
10 months ago


NEFT stands for National Electronic Funds Transfer, it a nation-wide electronic payment system facilitating one-to-one funds transfer. Through NEFT, an individual can transfer funds from his bank account to any other bank account in the country. To use NEFT services on can take help of any of the following modes: 

  • Internet Banking
  • Mobile banking
  • Other apps as supported by the bank in which the individual has an account.

RTGS (Real-Time Gross Settlement) on the other hand, can be defined as the continuous (real-time) settlement of funds individually on an order basis (without netting) at the same time the order is received. It is used for executing the transactions that are over the limit of NEFT, this means under RTGS those transactions are executed which cannot be executed under NEFT. The transactions once undertaken are final and irrevocable.

As per the banking regulations generally, transactions above Rs 2 lakhs cannot be executed through NEFT. However, the maximum NEFT limit varies from bank to bank and is usually different for most of the banks. So, to execute transactions electronically that are high in value RTGS is used otherwise, NEFT is used.