Summary: NEFT, RTGS, and IMPS are some of the most popular funds transferring systems in India. NEFT and RTGS were introduced by the Reserve Bank of India (RBI) whereas IMPS was introduced by the National Payments Corporation of India (NPCI). Keep on reading about IMPS vs RTGS vs NEFT to find out more about their differences.
In the realm of electronic fund transfers, three systems are the most prominent – Immediate Payment Service (IMPS), Real Time Gross Settlement (RTGS), and National Electronic Funds Transfer (NEFT). Each system offers distinct advantages and caters to different needs, thereby making it essential for individuals to understand their differences and choose the right system for funds transfer.
Let’s look at the comparative analysis of IMPS vs RTGS vs NEFT to grasp their functionalities, benefits, and transaction charges.
India provides different methods for transferring money online like digital wallets, UPI, etc. However, some of the most commonly used methods that are used for transferring funds online are enumerated below:
NEFT and RTGS were first introduced by RBI (Reserve Bank of India) and IMPS was introduced by National Payments Corporation of India (NPCI). Keep on reading to learn more about these payments.
Immediate Mobile Payment Services is a type of bank transfer system where payments are processed in real-time. This type of system is managed by National payment corporation of India. IMPS transactions are conducted 24/7 throughout the year even on bank holidays, unlike RTGS and NEFT.
RTGS stands for Real-Time Gross Settlement which is a type of electronic fund transfer system used by banks and similar financial institutions for high value and time value transactions. Under this system, funds are transferred from one bank account to another account in real-time.
Gross in RTGS highlights that every transaction is settled independently and in full without netting and offsetting against other transactions. This helps ensure that funds are transferred securely and without dependency on other transactions.
National Electronic Funds Transfer (NEFT) is a type of payment system which facilitates one on one funds transfer. By using NEFT, you can transfer funds from one bank branch to another, which accepts payments. Money transfers that take place via NEFT system do not happen in real-time and settle in 23 and a half hours.
Let’s look at a quick comparison of IMPS vs RTGS vs NEFT based on their fund settlement time, payment options, full form, minimum and maximum transfer limit.
| Metrics | NEFT | RTGS | IMPS |
| Full Form | National Electronic Funds Transfer | Real-Time Gross Settlement | Immediate Mobile Payments Services |
| Fund Settlement Time | Half-hourly batches | Real-time | Real-time |
| Payment Options | Online and offline | Online and offline | Online |
| Minimum Transfer Limit | INR 1 | INR 2 lakh | INR 1 |
| Maximum Transfer Limit | No limit (Exception – INR 50,000 for cash-based remittance within India and Nepal) | No limit | INR 2 lakh |
IMPS stands for Immediate Mobile Payment Service under which payments are processed in real-time. RTGS stands for Real-Time Gross Settlement which is used for high value transactions. NEFT stands for National Electronic Funds Transfer, used to transfer funds from one bank account to another.
The charges for IMPS, RTGS and NEFT can vary depending on the bank you use and the mode of transfer (online or at the branch). Here is a brief overview of the charges levied by these payment systems:
NEFT: Under NEFT, no transaction fee is charged for the inward transaction which takes place for crediting money to the beneficiary accounts at the destination bank branch.
RTGS: No fee is charged for inward and online transactions. However, charges are applicable for outward transactions. You need to pay INR 25 for transferring funds between INR 2 to 5 lakhs. However, you must pay INR 50 for transactions exceeding the limit of INR 5 lakhs. Please note that GST is also applicable to the above-mentioned charges.
IMPS: Under the IMPS system, charges for IMPS transactions are determined by individual member banks and PPIs (Prepaid Payment Instruments).
The choice between IMPS, RTGS, and NEFT depends on various factors such as transaction urgency, amount, and convenience. IMPS stands out for its immediate processing capability, making it ideal for time-sensitive transactions.
RTGS, on the other hand, is used to process high-value transactions with real-time settlement. NEFT offers a cost-effective solution for non-urgent transactions but has longer processing times.
IMPS enables you to conduct instant inter-bank money transfers in real time. Unlike NEFT and RTGS, that are not available sometimes on holidays, IMPS is available 24/7 for the entire year, including the bank holidays.
If you want to transfer money in lump sum urgently, RTGS is a better choice. In case you want to transfer funds quickly but do not require an instant transfer, NEFT is a better option. In case you want to transfer money immediately including during bank holidays, IMPS is a better option.
NEFT is cheaper than RTGS because it does not levy any fee for transactions whereas RTGS charges INR 30 per transaction fees.
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