Electronic Fund Transfer (EFT) is a method of transferring money from one bank account to another without using physical cash or cheques. There are different types of EFT methods available in India, such as IMPS, NEFT, RTGS, UPI, etc.

IMPS and NEFT are two of the most commonly used EFT methods for online transactions. In this article, we will compare IMPS vs NEFT in terms of their features, benefits, and more.

What is IMPS (Immediate Payment Service)?

IMPS is a system that allows online money transfers between different banks using mobile devices, Internet banking and ATMs. It is available 24/7 (even on holidays), ensuring that money is credited to the beneficiary’s account instantly.

IMPS was launched by the Indian government in 2010 as a pilot project, and since then, many banks have joined the system.

To use IMPS, you need to follow the below-given steps –

  1. Connect to your bank’s mobile or Internet banking service and add the beneficiary’s details, such as name, account number, IFSC and mobile number.
  2. Select the account from which you want to transfer money, enter the amount and confirm the transaction by clicking on the payment links.
  3. You will receive an OTP on your registered mobile number, which you must enter to approve the transaction. You will also get a confirmation message with a unique transaction reference number.

IMPS is a fast, secure and convenient way of transferring money, especially for small and urgent payments. It is also cheaper than other fund transfer modes, as the transaction charges are nominal. You can transfer any amount, even Re 1, to people using the same bank as yours, or a different bank.

What is NEFT (National Electronic Funds Transfer)?

NEFT is a system that allows fund transfers between accounts enabled for NEFT. It was initiated in 2005 and is maintained by the Reserve Bank of India (RBI). It operates through electronic messages and is available round-the-clock, 365 days of the year.

To use NEFT, you need to follow the below-given steps –

  1. Fill out an application form with the details of the beneficiary and authorise the branch to debit your account and transfer the amount. 
  2. The branch then sends the message to its pooling centre, which forwards it to the NEFT Clearing Centre operated by the RBI.
  3. The Clearing Centre aligns the transactions bank-wise and makes accounting entries for the banks participating in the system. It then sends the messages to the destination banks, which credit the amount to the beneficiary’s account.

NEFT’s money transfer features include safety, low cost, high reliability and faster fund movement.

Now that you understand what is IMPS and NEFT, let’s discuss the distinctions between them.

Difference between IMPS and NEFT

Here is a comparison of IMPS and NEFT differences based on various parameters:

Parameters IMPS NEFT
Definition IMPS stands for Immediate Payment Service. It is a real-time interbank electronic fund transfer service that allows instant money transfer or third-party transactions through mobile phones, Internet banking and ATMs. NEFT stands for National Electronic Funds Transfer. It is a nationwide payment system that facilitates one-to-one fund transfers from one bank account to another. It operates in hourly batches during the bank’s working hours.
Money Transfer Time IMPS transfers money instantly, within seconds. It is available 24/7, throughout the year, including bank holidays. NEFT transfers money in batches, which may take up to two hours, depending on the settlement cycle. It is operates 24/7, providing round-the-clock accessibility for users.
Regulatory Bodies IMPS is regulated by the National Payments Corporation of India (NPCI), an umbrella organisation for all retail payment systems in India. NEFT is regulated by the Reserve Bank of India (RBI), the supreme monetary authority.
Speed IMPS is faster than NEFT as it involves no waiting time or delay. It is suitable for urgent and small-value transactions. NEFT is slower than IMPS as it involves the pooling of transactions, clearing centres and batch-wise settlement. It is suitable for non-urgent and large-value transactions.
Transaction Settlement IMPS follows a one-to-one, direct settlement model, where each transaction is individually processed and settled by the remitting and beneficiary banks. NEFT follows a deferred net settlement model, where transactions are accumulated and settled in batches by the clearing house at fixed intervals.
Use through NetBanking

  1. Login to the NetBanking portal of your bank and select the IMPS option.
  2. Enter the beneficiary’s mobile number, MMID (Mobile Money Identifier), amount and remarks.
  3. Confirm the transaction with a PIN or password.

  1. Log in to the NetBanking portal of your bank and select the NEFT option.
  2. Add the beneficiary’s name, account number, IFSC, amount and remarks.
  3. Confirm the transaction with a PIN or password.
Use through Mobile Banking

  1. Download the mobile banking app of your bank or use the SMS facility.
  2. Register for mobile banking and get your MMID from your bank.
  3. Select the IMPS option and enter the beneficiary details such as mobile number and MMID, or account number and IFSC.
  4. Enter the amount and your MPIN to authorise the transaction.

  1. Download the mobile banking app of your bank.
  2. Register your mobile number and select the NEFT option.
  3. Enter the beneficiary’s name, account number, IFSC, amount and remarks.
  4. Confirm the transaction with a PIN or password.
Mobile-based / P2P Payments IMPS supports mobile-based or peer-to-peer (P2P) payments, where you can transfer money to another person using only the mobile number and MMID. NEFT does not support mobile-based or P2P payments. You need to enter the bank details of the beneficiary, such as the account number and IFSC, to transfer money.
Transfer Limits The maximum transaction limit per transaction is Rs. 5 lakhs. There is no maximum transaction limit for NEFT. However, banks may impose some limits.
Transaction Modes IMPS is mainly an online mode of fund transfer, which can be done through mobile phones, Internet banking and ATMs. NEFT can be done both online and offline, through Internet banking, mobile banking, ATMs, or by visiting the bank branch and filling out a form.
Transaction Charges IMPS charges vary from bank to bank, depending on the amount and the channel used for the transaction. The charges are usually in the range of Rs. 2.5 to Rs. 25 per transaction, excluding GST. NEFT charges also vary from bank to bank, depending on the amount and the channel used for the transaction. The charges are usually in the range of Rs. 2.5 to Rs. 50 per transaction, excluding GST. However, the RBI has removed the service charges for online NEFT transactions for savings account holders.
Cross-Border Transfer IMPS does not allow cross-border fund transfers. You can only transfer funds within India. NEFT allows one-way cross-border fund transfers. You can transfer funds from India to Nepal under the Indo-Nepal Remittance Facility Scheme. The maximum amount that can be transferred under this scheme is Rs. 2 Lakhs per transaction.

It is worth mentioning that RTGS vs NEFT is another concept that you should be aware of for conducting online transactions.


Technology has had an immense impact on the way we bank today. Online fund transfers via IMPS and NEFT have eliminated the need to visit bank branches and wait in long queues. These electronic transfer methods allow you to transfer money using smartphones, NetBanking and ATMs.

While IMPS is instant and available 24/7, it has a maximum fund transfer limit of Rs. 5 lakhs per transaction. On the other hand, NEFT does not have an upper limit for fund transfers, but might take up to 2 hours for completion.

Frequently Asked Questions

1. Which is better – IMPS vs NEFT?

The answer to this question depends on your need and purpose of transferring money. Both these services enable you to transfer money electronically from one bank to another.

2. Which is faster – NEFT or IMPS?

IMPS is faster than NEFT as it transfers funds instantly. NEFT, on the other hand, takes some time as it settles funds in hourly batches.

3. Is IMPS transfer free?

No, IMPS transfer is not free. It involves a nominal charge that the respective bank decides. The charge typically ranges from Rs. 2.5 to Rs. 25, plus GST, per transaction. However, some banks may offer IMPS transfers for free as a promotional or value-added service.

4. What is the limit of NEFT and IMPS?

There is no specific minimum limit for both NEFT and IMPS transfers. However, there is a difference in the maximum limit. IMPS transfers have a maximum limit of Rs. 5 lakhs per transaction, whereas NEFT transfers have no limit. You can transfer any amount using NEFT, except for cash-based remittances from India to Nepal, which have a limit of Rs. 2 lakhs per transaction.

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