Find out all about NEFT – the simplified domestic fund transfer process.
NEFT is an abbreviation for National Electronic Funds Transfer. It is a mode of money transfer that enables one-to-one payments within India. NEFT is owned, operated, and developed by the country’s Central bank and regulatory body – The Reserve Bank of India. Through this facility, you can transfer money from one account to another. You may initiate transfers between two bank accounts you own or from your account to others’ accounts in different banks. However, you can make this type of transaction only if your bank is NEFT-enabled.
NEFT is a secured, efficient, and reliable mode of domestic fund transfers. Account holders simply need to set up beneficiary details like their name, contact details, bank name, branch, account number and IFSC code to transfer funds. It typically takes five minutes to set up beneficiary details, and you can initiate the fund transfer 30 minutes later. Moreover, the beneficiary receives the funds in their account within a few minutes to a couple of hours.
Earlier, when RBI introduced NEFT, there were timeslots for clearance. However, the RBI changed the rules in December 2019, and you can now transfer money using NEFT 24/7, throughout the year and even on bank and public holidays.
Banks clear funds transferred through NEFT on a half-hour basis, which means the receiver will get the funds after half an hour from the time you initiate the transaction.
RBI has not imposed any upper or lower limit for fund transfer through NEFT. However, banks could set their own upper limits on per day transactions. Hence, you should check with your bank about NEFT fund transfer limits.
There are no charges for NEFT transactions done via internet banking or mobile banking apps. However, if you choose to conduct NEFT transactions at bank branches, your bank may levy a nominal charge based on the transfer amount. Here is the schedule of charges levied for online transactions
Maximum Transaction Amount in INR
Charges in INR
2.50 + GST
10,000 to 100,000
5 + GST
100,000 to 200,000
15 + GST
200,000 and above
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NEFT transactions are permitted only with Indian borders, with the rare exception of Nepal. If you have family, friends, or business associates in NEPAL, you can transfer money via NEFT. Nepalese beneficiaries can receive the fund transfer even if they do not have a bank account with a bank in Nepal.
Now that it is clear what NEFT means let us look at some of its advantages.
Use the steps below to transfer funds via NEFT.
Your bank will send both you and your beneficiary an SMS confirming the transaction.
Now that we have discussed NEFT meaning, how it works, its advantages, and how to initiate NEFT transactions, you can use it anytime. It is a convenient, easy, quick online method of fund transfer that eliminates the need to visit a bank.
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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.