National Electronics Fund Transfer, also known as NEFT, allows people to transfer funds electronically from one bank account to another. This money transferring system was launched in 2005 and has given way to IMPS, UPI, and many other payment solutions that are in use today.
Even with faster payment modes available, NEFT holds its own place in the financial market. It is particularly relevant for companies and individuals who wish to transfer large sums of money. This is because IMPS and UPI come with daily transaction limits that vary from bank to bank.
Thus, it is essential to understand how you can go about transferring funds by using NEFT.
Transferring money using NEFT
Transferring funds through NEFT does not require the consumer to follow complex transfer procedures. The following steps are simple to follow and do not eat up a lot of time.
1) Select a beneficiary
Whether you are transferring money to a family member or to a merchant, you must have their specific banking information in order to initiate the transaction. The relevant details include the beneficiary’s name, IFSC code, bank account number, account type, and bank name.
You must log into your net banking portal with your user ID and passport. Then, you must click the option for third-party transfers. Within the page that you are directed to, you may find a series of options including â€˜transfer within the bank’, â€˜transfer via card pay’ and transfer to other banks’. Select the right option based on the destination bank of the beneficiary.
You can also add a new beneficiary on this page. While adding a new beneficiary, the page will present two options for you to select. These options may be â€˜add beneficiary of another bank’ and â€˜add beneficiary within the same bank’. Of course, the wording may differ, but the intent will remain the same. Select the right option based on the destination bank of the beneficiary. Once you have added all the essential details, you may receive an OTP on your phone. This OTP will help you verify that you do want to add the concerned person as your beneficiary. Confirm the same in order to continue.
Depending on the bank you operate with, it can take anywhere between a few hours to a few minutes for the bank to add the new beneficiary. Once the beneficiary has been made active, you may receive a confirmation SMS or email. Again, this depends on the bank.
2) Enter the funds you wish to transfer
Once you have selected the beneficiary you wish to transfer funds to, you must enter the right amount of funds. To do so, you must first confirm the bank account number from which you want to deduct the funds. If you have a single bank account, you can skip this step. Otherwise, select the account as per your convenience.
After you have selected the account, you will be asked to enter the amount to transfer. Ensure you type the correct amount.
You may have to verify the transaction through a pre-set PIN code or an OTP. This security measure helps banks prevent fraud or theft. Once you have entered the verification code, you will receive a text message on your registered mobile number confirming that the payment amount has been deducted from your account.
On average, it can take 30 minutes or more for the beneficiary to receive the payment. Depending on the bank you use, you may get a confirmation text regarding the transfer of the funds. If your bank does not send these messages, you can always ask the beneficiary to confirm the same with you.
Do keep in mind that in order for a NEFT payment to work, both you and the beneficiary have to be a part of a bank branch that is NEFT enabled. As not all bank branches are under the NEFT network, this is something that you will have to confirm beforehand.
What are the transaction limits for NEFT payments?
The following are the transaction limits that are placed on NEFT payments:
|Minimum payment||Re 1|
|Maximum payment||No upper limit|
|Payments made to Nepal||Rs 50,000 per transaction|
There are no transaction fees for NEFT! As a means to promote digital transactions, RBI has scrapped transaction fees for all NEFT transactions, irrespective of your bank.
Time limit for NEFT payments
At present, NEFT payments can be made between 8 am and 7 pm. But from December 2019 onwards, RBI will allow NEFT payments to be made round the clock.
NEFT payments are an extremely convenient form of transferring funds electronically. It is a quick and cost effective system for transferring funds, and it also accommodates transfers to NRE and NRO accounts. You can find out if your bank branch is NEFT enabled by checking their website.