The digital financial landscape has witnessed a significant shift from cash-based transactions to online methods, especially after the demonetisation drive in India. With the emergence of various payment options like UPI, digital wallets, and even cheques, it is essential to understand the difference between NEFT, RTGS and IMPS. While all three methods allow you to transfer funds electronically, they differ in transaction speed, transfer limits, and charges. In the upcoming sections, you will get to know these variations and it will help you determine which method best suits your fund transfer requirements.

What are IMPS, NEFT, and RTGS?

IMPS, RTGS, and NEFT are all popular electronic fund transfer methods in India. IMPS (Immediate Payment Service) allows instant transfer of funds 24/7, while NEFT (National Electronic Funds Transfer) typically takes a few hours to settle transactions within India. On the other hand, RTGS (Real-Time Gross Settlement) is used for high-value transactions with immediate settlement. Let’s understand them in detail.

NEFT (National Electronic Funds Transfer)

NEFT is a one-to-one payment facility that allows individuals, businesses, and organisations to transfer funds electronically between banks offering NEFT-enabled services. Different from real-time payment systems like RTGS and IMPS, NEFT transactions are processed in batches and usually take up to 2 hours to complete. This characteristic is particularly important when it comes to third-party transactions, as the delayed processing may affect the time it takes for the funds to be transferred between the sender, the intermediary banks, and the recipient.

However, since December 2019, NEFT has been available 24*7, meaning you can initiate transactions anytime. To transfer funds through NEFT, Log in to Internet banking – Select NEFT transfer – Add beneficiary details – Verify and approve beneficiary – Initiate fund transfer.

There are no limits on the amount that can be transferred via NEFT. The charges for NEFT transactions vary from Rs. 2.5 to Rs. 25 based on the transfer amount. NEFT payments are processed in batches of half an hour as per RBI guidelines.

RTGS (Real-Time Gross Settlement)

RTGS is a real-time interbank fund transfer system operated by the Reserve Bank of India (RBI). It allows individuals and businesses to make high-value transactions with immediate settlement. The safety and security of RTGS transactions are ensured due to its management by the RBI.

RTGS operates one-to-one; each transaction is settled individually in real time.

Since July 01, 2019, RBI waived RTGS processing charges, potentially benefiting customers at banks’ discretion. RBI mandates banks to follow specific RTGS charge frameworks, including free inward transactions and capped fees from ₹25 to ₹50 for outward transactions. You can initiate RTGS transfers online through Internet banking or offline by visiting your bank branch.

RTGS is available throughout the year at any time and is ideal for large-value transactions where immediate settlement is required. The legal backing of RTGS transactions minimises the risk of fraud and ensures trust and reliability.

IMPS (Immediate Payment Service)

IMPS is an instant interbank electronic funds transfer service that operates in real time. It allows users to transfer funds up to a maximum daily limit of Rs. 5 Lakh. The transaction charges for IMPS range from Rs. 5 to Rs. 15, depending on the conditions set by the respective bank.

You may also encounter additional service tax charges on IMPS transactions. IMPS offers 24/7 inter-bank fund transfer convenience, making it highly accessible and convenient. It is safe, efficient, and economical.

IMPS can be accessed through both Internet banking and mobile platforms, eliminating the need for physical bank visits and even account numbers. It is available even during public holidays and bank closures. The payer and the payee receive immediate transaction notifications from the bank upon completing an IMPS transaction.

IMPS can be used for various purposes, such as receiving payments, making merchant payments, conducting mobile banking transactions, and more.

Difference Between NEFT, RTGS, and IMPS

To better understand NEFT vs. RTGS vs IMPS, let’s examine the table showing NEFT RTGS IMPS difference:





Minimum and Maximum Transfer Values NEFT allows transfers starting from Rs. 1, with no upper limit. RTGS has a minimum transfer value of Rs. 2 lakhs and no maximum limit. IMPS transactions can begin as low as Rs. 1 and are capped at Rs. 5 lakhs.
Settlement Type and Speed NEFT operates as a batch settlement system where transfers are processed in batches and subject to cut-off timings.  RTGS is a one-on-one settlement system that ensures immediate fund transfer upon initiation.  IMPS also operates on a one-on-one settlement basis, allowing for instantaneous transfers.
Service Availability NEFT operates 24/7, providing round-the-clock accessibility for users. RTGS availability varies based on individual bank hours, which may restrict user’s access to the service during certain times of the day. IMPS is accessible 24/7, accommodating users’ transaction needs at any time.
Mode and Process NEFT  can be used both online and offline, offering you flexibility in choosing your preferred transfer mode. RTGS can be used both online and offline, offering you flexibility in choosing your preferred transfer mode. IMPS transactions are conducted exclusively online through internet banking or mobile banking applications.
Transaction Speed NEFT transactions are relatively slower than RTGS and IMPS transfers. The processing time for NEFT can take up to 2 hours. RTGS transactions are faster than NEFT, with funds typically being credited within 30 minutes. IMPS enables instant transactions, allowing for immediate fund transfers.
Transaction Charges NEFT does not levy charges for inward transactions or online processes. The outward charges for NEFT transactions vary from Rs. 2.5 to Rs. 25 based on the transfer amount. RTGS also does not levy charges for inward transactions or online processes. The outward transactions charges range from up to Rs. 25 plus GST for transfers between Rs. 2 lakhs to Rs. 5 lakhs and up to Rs. 50 plus GST for transfers of Rs. 5 lakhs and above. The charges for IMPS transactions may vary among different banks.
Reliability NEFT is considered reliable and secure for fund transfers. RTGS  is considered reliable and secure for fund transfers. IMPS is considered reliable and secure for fund transfers.

How to Choose Between IMPS, NEFT, and RTGS

When comparing NEFT vs RTGS vs IMPS for your fund transfer needs, there are a few key factors to consider.

  • Transaction Speed

Transaction speed varies between these payment charge methods. NEFT transactions are processed in half-hourly batches and can take up to a few hours to complete. RTGS transactions are processed individually and are usually completed within a few minutes. On the other hand, IMPS allows for real-time funds transfer, ensuring instant transactions.

  • Fees and charges

IMPS, NEFT, and RTGS charges should also be considered when selecting the best option for yourself. NEFT transactions are generally affordable, with nominal charges that vary based on the amount transferred. RTGS transactions usually have higher charges compared to NEFT due to their faster processing time. IMPS charges can vary depending on the bank or payment service provider.

  • Network compatibility

Lastly, considering network compatibility is also essential. All banks and financial institutions across India widely accept NEFT. RTGS is available only for large-value transactions and requires both the sender’s and receiver’s banks to be part of the RTGS network. IMPS can be accessed through various platforms such as mobile apps, internet banking, SMS banking, payment links, and ATMs.

Important Things to Consider Before Initiating a Fund Transfer

Here are some crucial things to consider before initiating a fund transfer:

  • Fund Transfer Limits:

NEFT, RTGS, and IMPS each have distinct fund transfer limits. For IMPS, transactions up to ₹5 Lakhs can be easily facilitated. RTGS is suitable for above ₹2 Lakhs, making it ideal for larger transfers. On the other hand, NEFT offers flexibility with no maximum limit, allowing you to transfer any amount according to your needs. Whether you need to make a small payment or transfer a large sum, these options cater to various fund transfer requirements.

  • Transfer Time:

When choosing a payment network, the transfer time is a crucial factor to consider. While NEFT might take longer, IMPS and RTGS offer instant transfers. NEFT is ideal for non-urgent transfers where the funds can be credited within a few hours. On the other hand, IMPS and RTGS are recommended for time-sensitive transactions that require immediate funds transfer. To save time, you can also use Razorpay smart collect. It enables you to create Customer Identifiers to accept large payments from your customers via bank transfers via NEFT, RTGS, and IMPS.

  • Transaction Fees:

The fee structure for outward transactions varies across NEFT, RTGS, and IMPS. NEFT typically incurs the lowest transaction fees, making it a cost-effective option for fund transfers. IMPS charges nominal fees for its money transfer features, providing a convenient and affordable solution. On the other hand, RTGS fees range from ₹25 to ₹50 based on the transfer amount, ensuring secure and reliable transactions. It is important to note that inward transactions across all networks are free of charge, making them an attractive choice for receiving funds.

  • GST Implications:

When it comes to NEFT, RTGS, and IMPS transactions, it’s essential to consider the GST implications. In addition to the transaction fees charged by banks or service providers, an 18% GST is applicable on these fees. This means that you need to factor in this GST component when calculating the overall cost of your fund transfer. 

  • Network Compatibility:

For successful fund transfers, the sender’s and receiver’s banks must be part of the same payment network. Let’s take IMPS as an example. To initiate an IMPS transfer, both the sender and receiver banks need to be on the IMPS network. This ensures seamless connectivity between banks and enables faster and more convenient transactions. It is essential to check if your bank is compatible with the desired payment method before initiating any funds transfer.

Frequently Asked Questions (FAQs)

What are the most common methods of online money transfer?

The most common methods of online money transfer in India include NEFT, RTGS, IMPS and UPI. NEFT is a secure and efficient method for transferring funds between bank accounts. RTGS is used for high-value transactions, with funds being settled in real time. IMPS and UPI allow for instant fund transfers using mobile phones.

Which is better: NEFT or RTGS or IMPS?

The choice between NEFT, RTGS, and IMPS depends on the transaction amount and urgency. For low-value transactions under ₹2 lakhs, NEFT is suitable as it is cost-effective and has no minimum transaction limit. RTGS is ideal for high-value transactions above ₹2 lakhs that must be settled immediately. IMPS is the fastest option, allowing instant fund transfer 24/7.

What is the limit of NEFT, IMPS, and RTGS per day?

The per-day transaction limits for NEFT, IMPS, and RTGS vary based on the bank’s policies. Generally, NEFT has no daily limit, while IMPS allows transactions up to ₹5 lakhs daily. RTGS has a minimum transaction limit of ₹2 lakhs with no upper cap.

Which is faster: IMPS or NEFT?

IMPS is faster than NEFT as it provides instant fund transfer options. With IMPS, you can send money instantly to any bank account anytime, even on weekends and holidays. NEFT transfers are processed in batches throughout the day and typically take a few hours.

How long does an RTGS transfer take?

RTGS transfers are settled in real time, and the funds are credited to the beneficiary’s account within 30 minutes of initiation. 

Is RTGS available 24 hours?

Starting from December 14, 2020, RTGS services are available around the clock, 365 days a year. This significant change allows real-time, secure fund transfers anytime, including weekends and holidays. 


Write A Comment