Fully formed as National Electronic Funds Transfer, NEFT is an electronic system for money transfer. The NEFT system is completely managed by the Reserve Bank of India (RBI), and allows the transfer of funds only between NEFT-enabled bank accounts.
One of the few most important concerns of users is what is the NEFT transfer time? Are there any restrictions on when you can ttransfer money via NEFT or not?
Continue reading this blog to find out!
More about NEFT
NEFT is one of the most common methods of funds transfer. An individual can perform NEFT transactions only if the sender’s and the receiver’s bank accounts are enabled for NEFT payments. These transactions are not real time and hence, take a few days to be processed completely. The RBI guidelines state that all NEFT transactions are settled in batches of half an hour.
To transfer funds from one NEFT-enabled bank account to another, the sender must add the receiver as a beneficiary on his internet banking portal. One of the major benefits of performing transactions through NEFT is that these transactions don’t have any maximum or minimum limit. However, there is a minimal fee of Rs. 2.5 to Rs. 25 on NEFT transactions, depending on the amount being transferred.
NEFT Transfer Time
Since all the NEFT transactions are performed under the guidance of RBI, the timings and process of NEFT transactions is all under the RBI’s purview.
Before December 2019, RBI had fixed NEFT transfer time during which NEFT transactions could be processed. Any NEFT transaction would 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, there are no restrictions on NEFT transfer time. This means that NEFT transactions can be performed 24*7. This was done to promote digital transactions and global integration of financial markets. It must be noted that NEFT uses quite a simple mechanism to perform the transfer of funds from one bank account to another. Explained below is the process of how NEFT works.
How NEFT Transactions Work?
- As and when a user initiates a transaction through NEFT, it gets queued up
- NEFT transactions are cleared in batches, every hour
- NEFT transactions that are initiated after the bank working hours are automatically assumed to be automated transactions initiated using the ‘Straight Through Process’ (STP) modes by the bank
How to perform NEFT Transaction: The Steps
Transfer of funds via NEFT is simple and convenient. Here’s what you need to do-
- 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
NEFT Transactions: Conditions to be Considered
The following categories of people can transfer funds through NEFT-
- Any individual, corporate, firm, or company having NEFT-enabled bank account
- It is mandatory for the user’s bank to be a part of the NEFT network
- Internet banking should be activated on the user’s account
- Within the specified timings for NEFT transactions, a user can only transfer Rs. 50,000 in a day
- To perform any NEFT transaction, it is mandatory for the sender to know of the receiver’s bank account details, contact details and the IFSC code
Charges Applicable on NEFT Transactions
Until December 2021, NEFT transactions involved the following additional charges as money transfer fee-
|Transaction Amount||Fee Amount|
|Less than or equal to Rs. 10,000||Rs. 2.5|
|Between Rs. 10,000 and Rs. 1 Lakh||Rs. 5|
|Between Rs. 1 Lakh and Rs. 2 Lakh||Rs. 15|
|Equal to or more than Rs. 2 Lakh||Rs. 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.