Difference between NEFT and RTGS
02 Jul 2021

Difference between NEFT and RTGS: NEFT VS RTGS

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All customers having savings and current account are eligible to use NEFT and RTGS services.

Key Takeaways

  • NEFT stands for National Electronic Funds Transfer whereas RTGS is short for Real-Time Gross Settlement.
  • NEFT is a payment system where the settlement of funds takes place in half-hourly batches.
  • RTGS a payment system of continuous and real-time settlement of fund transfers.
  • RTGS is preferred for urgent transfer of large amounts.
  • NEFT is preferred for transfers that are not time-sensitive.


Mrs Lohia runs a home-based bakery and believes that inter-bank transfer can be an extremely useful and convenient service. It would enable her to pay for her supplies as well as receive payments from her clients. But Mrs Lohia has not been able to avail of these services because she often gets confused by the acronyms like NEFT, RTGS, and IMPS while attempting to transfer funds. While she has some ideas, she is unsure of the difference between NEFT and RTGS and IMPS. This article is for Mrs Lohia and others like her. It is to designed to help the likes of her become well-informed bank customers and take optimum advantage of their banking services.

Different ways of transferring money

In India, there are three different ways in which you can transfer money online. These include the National Electronic Fund Transfer (NEFT), Real Time Gross Settlement (RTGS) and Immediate Payment Services (IMPS). All of these are electronic payment systems that allow you to transfer funds from one bank to another within the country. Of these payment systems, NEFT and RTGS are extremely popular, especially among business owners who need to make large amounts of transactions. It is, therefore, crucial to understand the difference between NEFT and RTGS. Let us begin with the meaning of two types of fund transfers.

What is NEFT?

The acronym 'NEFT' stands for National Electronic Funds Transfer. It is a 24*7 available service of funds transfer wherein the transaction gets processed in batches of half an hour. The RBI has not specified any minimum or maximum limit on the transfer amount. All you need to provide is a few details of the beneficiary to initiate an NEFT transfer. The details required for a typical NEFT transfer are the name of the beneficiary, account number and account type, name of the bank, and the Indian Financial System Code (IFSC) of the bank.

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What is RTGS?

The acronym 'RTGS' stands for Real-Time Gross Settlement. RTGS is a funds transfer system based on a gross settlement concept where money is moved from one bank to another in real-time. RTGS is primarily designed for high transaction amounts. As such, while there is no maximum limit on the transfer amount, you need to transfer a minimum of INR 2 lakhs at a time. RTGS is especially useful when the transaction amount is high, and payment needs to be processed immediately. Like with NEFT, the details required for a typical RTGS transfer are the name of the beneficiary, account number and account type, name of the bank, and Indian Financial System Code (IFSC) of the bank.


The RTGS and NEFT difference can be best understood by the way each payment system processes its transactions. While NEFT processes the transactions in half-hourly batches, the transfers via RTGS are processed in real-time on a transaction-by-transaction basis. One can say that the fundamental difference between NEFT and RTGS is that while RTGS payments are based on gross settlement, NEFT payments are based on net settlement.

Let us now understand the NEFT and RTGS difference through different points of comparison. They are as under:

Transaction Charges

In NEFT transactions, no charges are levied if the transfer is done online. However, charges may apply on offline NEFT transactions availed via a bank branch initiating the service. As far as RTGS transactions are concerned, there are no charges levied on this type of fund transfer.

Transaction Timings

When it comes to online RTGS and NEFT transactions, you can transfer funds at any time of the day. Both the services are available and accessible 24×7, 365 days a year. That said, the offline NEFT facility is subject to the rules and timings of specific banks and their branches, responsible for initiating the transfers.

Transaction Limit

As mentioned earlier, no minimum or maximum limit of transfer exists in NEFT transactions. You can transfer anything from INR 10 to INR 1,000,000 per transaction easily and conveniently. However, when it comes to RTGS, there is a minimum limit of INR 2 lakhs per transaction. Once again, there is no maximum limit of transaction with RTGS, and you can transfer any sum of money as needed. It should, however, be noted that banks may place maximum limits based on their own risk perception.

RTGS vs NEFT - Which is the Better Method of Transferring Funds

Understanding the difference between NEFT and RTGS is crucial in choosing which method of transaction suits you best. In case you need to initiate transactions of large sums of money in real-time, RTGS is the better option for you. Conversely, if you have to transfer small amounts without any urgency of clearance, NEFT is the better option.

Both the methods are safe and secure systems of funds transfers and are also monitored by the RBI. Both the services are easily accessible and available 24×7×365 via bank websites, internet banking portals, and mobile applications, downloadable from the Google Play and iOS App Store, on your internet-enabled phones.

Do you need a Bank Account for RTGS and NEFT?

A savings account or current bank account is required for online transactions of both RTGS and NEFT. However, a person having no bank account can also send funds through NEFT. Such a person will have to deposit cash at the nearest NEFT enabled branch of any bank. The transfer can be done to a beneficiary having a bank account with another NEFT enabled bank. There is a maximum limit of INR 50,000 for such transactions.


Online transfer of funds is a vital and essential service in the global banking industry. For India, these payment systems have revolutionised the banking sector of the country and given momentum to the growth of a digital and cashless economy. After understanding different methods of transferring funds online and figuring out the NEFT and RTGS difference, Mrs Lohia has also started sending and receiving payments online. In fact, she believes that this push for digitalisation has made her financials more transparent and secure.

With the digibank by DBS app, you can easily and conveniently initiate RTGS and NEFT transactions. All transactions done via the digibank by DBS mobile app are safe and secure.

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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.