Difference Between NEFT, IMPS, and RTGS Transfers

In our modern digital world, transferring money has become more convenient and accessible than ever before. The cumbersome trips to the bank are now a thing of the past; with just a few taps on your device, you can transfer funds electronically through several services like NEFT, IMPS, and RTGS. 

If you're not familiar with these money transfer methods and need guidance on which to choose for your requirements, this blog post will explain each method and its benefits, as well as clarify the key differences between NEFT vs IMPS vs RTGS transfers.

NEFT Transfers 

NEFT or National Electronic Funds Transfer is a centralised payment system operated by the Reserve Bank of India (RBI). It allows users to transfer funds electronically from one account to another across India. One of the key advantages of NEFT is its availability round the clock. 

Benefits of NEFT: 

• Convenient: NEFT transfers can be done online or offline, making it easily accessible for users. 
• Quick: While NEFT transactions are not instant like IMPS, they are still faster compared to traditional methods like issuing cheques or demand drafts (DD). 
• Economical: NEFT charges are nominal and vary based on the amount transferred. 
• No Need for Cheques or DDs: Unlike traditional methods, NEFT does not require you to submit any physical cheques or DDs for money transfer. 

IMPS Transfers 

IMPS or Immediate Mobile Payment Services is a real-time inter-bank money transfer system that allows users to transfer funds instantly on a 24x7 basis, even on bank holidays. It is accessible through various platforms, including mobile apps, internet banking, SMS banking, payment links, and ATMs. 

Benefits of IMPS: 

• Instant Transfers: IMPS ensures quick and secure money transfers, with funds getting credited within a few seconds. 
• No Need for IFSC Code and Account Number: Unlike NEFT and RTGS, which require you to know the beneficiary's IFSC code and account number, IMPS allows you to perform transfers without these details. 
• Accessibility: IMPS is available 24x7 throughout the year, making it convenient for users who need to transfer funds urgently. 
• International Transfers for NRIs: IMPS money transfer services are also available for NRI customers to transfer funds from an NRI account to the account of an Indian resident. 

RTGS Transfers 

RTGS or Real-Time Gross Settlement is another electronic funds transfer system operated by the RBI. The key difference between NEFT and RTGS is that RTGS transactions are processed in real-time, meaning the payment is settled immediately. 

Benefits of RTGS: 

• Ideal for Large Transactions: RTGS is designed for high-value transactions where immediate clearing is required, such as real estate purchases or business payments. 
• Minimised Risk: With RTGS transfers, there is less possibility of counter-party default as the funds are settled in real-time. 
• Security: Since RTGS transfers occur online, there is no risk of physical cheques being stolen or instances of forgery. 
• Efficient Capital Management: Organisations can use RTGS to manage their business capital efficiently by making large fund transfers in a single transaction. 

Key Difference Between NEFT, IMPS and RTGS 

Here is a comparison table summarising the differences between NEFT, IMPS, and RTGS: