NEFT Charges: How Much Extra do you Need to Pay on NEFT Transactions?

The National Electronic Funds Transfer system is one of the various methods of online money transfer. It is regulated by the RBI and hence, works as per the guidelines laid down by RBI.

  • NEFT is a one-to-one payment facility
  • NEFT transactions can be processed only between the banks that offer NEFT-enabled services
  • Transactions made through NEFT do not take place in real-time; implying that it takes a few days for NEFT transactions to complete
  • Before December 2019, RBI had fixed timings during which NEFT transactions can be processed. Any NEFT transaction will be processed only between 8:00 AM and 6:30 PM from Monday to Friday, and 8:00 AM to 12:00 PM on Saturdays. However, from 2020, NEFT transactions can be performed 24*7
  • To transfer funds through NEFT, you must add beneficiaries on the internet banking portal of your required bank
  • There are no limits on the amount of NEFT transactions
  • There is a fee applicable on all NEFT transactions; the amount varies from Rs. 2.5 to Rs. 25, depending on the amount being transferred
  • As per RBI guidelines, the payments made via NEFT are processed and settled in batches of half-hour

Read more: What is NEFT?

Charges Applicable on NEFT Transactions

Until December 2021, NEFT transactions involved the following additional charges as money transfer fee-

Transaction AmountFee Amount
Less than or equal to Rs. 10,000Rs. 2.5
Between Rs. 10,000 and Rs. 1 LakhRs. 5
Between Rs. 1 Lakh and Rs. 2 LakhRs. 15
Equal to or more than Rs. 2 LakhRs. 25

However, from January 2021, RBI has removed all the applicable charges on online NEFT transactions. This initiative was taken to promote digital transactions. RBI stated that with effect from 1 January 2020, no banks shall levy any charges from their savings account holders on online fund transfers done through NEFT (National Electronic Funds Transfer) system.

Steps to Transfer Funds through NEFT

Transfer of funds via NEFT is simple and convenient. All you need to do is follow these steps-

  • Log in to the your internet banking account
  • On the main page, click on ‘Fund transfer’
  • From the drop down menu that appears, select ‘NEFT’
  • Note that you need to ‘Add beneficiary’ to the list of beneficiaries in your account if you haven’t done so already
  • To add a new beneficiary, you need to click on ‘Add beneficiary’ option on the page
  • Enter the beneficiary’s required information such as his/her name, bank account number, IFSC, etc.
  • Click on ‘Confirm’ or ‘Add’
  • To authenticate this step, you will be asked to enter the OTP sent to your registered mobile number
  • After doing so, your action would be processed. It will take around 24 hours to add a beneficiary
  • Once the beneficiary is added to your account, you need to select the beneficiary details (to whom you need to send the money) from your list of beneficiaries
  • Enter the amount that needs to be transferred and confirm your transaction
  • Click on ‘Confirm’ and the amount will be transferred from your bank account to the other’s

What are Benefits of Making Transactions through NEFT?

Following reasons explain why NEFT is the preferred method for transferring funds from one bank account to another-

  • One of the major benefits is that there is no minimum or maximum NEFT amount transfer limit. Users can transfer as low as Re.1 through NEFT
  • You can transfer money through NEFT online; without the involvement of cheques or demand drafts or without having to visit the bank
  • RBI has laid such guidelines that allows the sender and receiver to stay updated about the fund transfer through notifications via SMS and/or email
  • Funds through NEFT can be transferred between 1 hour and 24 hours
  • Since NEFT transactions are governed by the RBI, there is no doubt on the safety of these transactions
FAQs
Are there any additional charges on NEFT transactions?
There were some additional charges on NEFT transactions until December 2019. However, with effect from January 2020, RBI ordered all banks not to charge any additional charges on online transactions made via NEFT.
How much time does it take to settle NEFT transactions?
All NEFT transactions can be settled within 24 hours. The actual time required for the settlement of these transactions, however, may vary from bank to bank.
Are there any limits on minimum and maximum amount to be transferred through NEFT?
As per RBI’s guidelines, there is no limit on the minimum or maximum amount that can be transferred through NEFT. However, certain banks may have their own restrictions on the value of the amount to be transferred.
Is it important to add a beneficiary to send money through NEFT?
Yes, it is absolutely necessary to add a beneficiary to your internet banking account in order to transfer money through NEFT. The beneficiary should be added before starting the process of money transfer as it takes around 24 hours time to add a beneficiary.
Who can make NEFT transactions?
Any individual, firm or company can carry out NEFT transactions. It is only mandatory that the account holder’s bank account is NEFT-enabled for the transaction to take place.
Can I make a NEFT transaction on the weekend?
Yes, you can initiate a NEFT transaction on the weekend. However, the transaction will be processed only on the next working day.
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