NEFT, which stands for National Electronic Funds Transfer, is a system that allows individuals to transfer money from one bank account to another using various online and offline methods. Compared to other modes of money transfer like IMPS, RTGS, and UPI, NEFT is preferred due to its low processing cost, high transfer limit, and fewer restrictions on fund transfers.
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To use NEFT, individuals, corporations, firms, or companies must have NEFT-enabled bank accounts. It’s important to note that the user’s bank must be part of the NEFT network. Additionally, active internet banking status is required to perform NEFT transactions. The sender must also have the receiver’s bank account details, contact information, and the IFSC code to initiate an NEFT transfer.
NEFT Transfer Limit
NEFT (National Electronic Funds Transfer) is a popular method for transferring funds between bank accounts, and one of its key advantages is that there is no set limit on the amount that can be transferred. The Reserve Bank of India (RBI) does not impose any minimum or maximum amount for NEFT transactions.
This means that whether you need to transfer a small amount like Re. 1 or a larger sum, NEFT allows you to do so without any restrictions. However, it’s important to keep in mind that individual banks may have their own policies and limits in place, so it’s a good idea to check with your bank regarding any specific restrictions they may have for NEFT transfers.
NEFT Transfer Timings
NEFT service is now available 24/7, which means you can transfer money at any time, any day of the year. Transactions are processed in batches every 30 minutes throughout the day. For example, if you make a transaction at 11:02 am, it will likely be processed by 11:30 am. This change allows for faster and more convenient money transfers through NEFT.
Charges on NEFT Transactions
- Inward Transactions: There are no charges at the destination bank* for receiving funds through NEFT.
- Outward Transactions:
- Processing Charges: The RBI has stopped charging banks for sending money through NEFT.
- Savings Account Holders: Banks cannot charge savings account holders for sending money through NEFT online.
- Other Outward Transactions: If the bank decides to charge for other NEFT transactions, the maximum fees allowed are:
- Up to ₹10,000: Maximum ₹2.50 (+ GST)
- Above ₹10,000 up to ₹1 lakh: Maximum ₹5 (+ GST)
- Above ₹1 lakh up to ₹2 lakhs: Maximum ₹15 (+ GST)
- Above ₹2 lakhs: Maximum ₹25 (+ GST)
Note that these charges are subject to applicable GST. It’s always a good idea to check with your bank for any specific updates or changes regarding NEFT transaction charges.
Destination bank*
The destination bank is simply the bank where the money is being sent to in an NEFT transaction. It is the bank where the person who is receiving the money has their account. For example, if you are sending money to your friend, their bank is the destination bank. The destination bank is responsible for receiving the money and crediting it to the recipient’s account.
Important Information for NEFT Fund Transfers
- Beneficiary’s Name: The full name of the person or entity you are sending money to.
- Beneficiary’s Branch Name: The specific branch of the bank where the beneficiary has their account.
- Beneficiary’s Bank Name: The name of the bank where the beneficiary has their account.
- Beneficiary’s Account Type: The type of account the beneficiary has, such as savings, current, or any other specific type.
- Beneficiary’s Account Number: The unique number assigned to the beneficiary’s account.
- Beneficiary’s Branch IFSC: A unique code called the IFSC (Indian Financial System Code) identifies the specific bank branch where the beneficiary’s account is held. It helps in routing the funds correctly.
- Sender and Beneficiary Legal Entity Identifier (LEI): For certain transactions, both the sender and beneficiary may be required to provide a unique identifier called the Legal Entity Identifier (LEI). This is used to identify legal entities engaging in financial transactions.
How to Transfer Money Through NEFT?
Step 1: Gather the necessary details
Ensure you have the following information:
- Beneficiary’s name
- Beneficiary’s account number
- Beneficiary’s bank and branch name
- IFSC code of the beneficiary’s bank branch
Step 2: Login to your bank’s online banking portal or mobile banking app using your credentials.
Step 3: Find the option to initiate an NEFT transfer. This is usually located in the “Fund Transfer” or “Payments” section.
Step 4: Provide the required details of the recipient, including their name, account number, bank, branch, and IFSC code. Double-check all the information for accuracy.
Step 5: Enter the amount you want to transfer to the beneficiary’s account.
Step 6: Review all the information you have entered and ensure it is accurate. Once you are satisfied, confirm the transfer.
Step 7: Depending on your bank’s security measures, you may need to provide additional authentication, such as an OTP (One-Time Password) sent to your registered mobile number.
Step 8: After successful authentication, you will receive a transaction confirmation with a unique transaction reference number.
Step 9: NEFT transfers may take some time to process, usually within a few hours or by the next business day, depending on the bank’s processing schedule.
Step 10: You can track the status of your NEFT transfer through your internet banking account or by contacting your bank’s customer support.
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Disclaimer: This blog is here to make complex processes easier to understand. However, please be aware that information might become outdated or change over time, or updates may occur. As a result, there might be some differences in the information provided. We do our best to keep everything up-to-date, but we recommend verifying information on official websites for accuracy.
