NEFT or National Electronics Funds Transfer is a facility offered by almost all the banks at this time. Owing to the multiple benefits that it offers, NEFT is also one of the most preferred modes of fund transfer. Through NEFT, users can transfer funds via internet banking at the comfort of their homes.
On top of this, all the NEFT transactions and related guidelines are decided by the Reserve Bank of India, which promotes safety and security of the transactions. Now, if you are willing to make the most of the benefits offered by NEFT transactions, you must know how NEFT works, how much charges do you need to pay on these transactions and what is the NEFT settlement time.
Continue reading this blog to find out answers to all these questions!
How much time does it take for NEFT Transactions to Settle?
NEFT services are available round the clock, even on holidays. However, these services are settled in batches of half an hour. This means that NEFT transactions are settled in 48 hourly batches, every day.
The settlement of the first batch of NEFT transactions begins at 12:30 AM and ends at 12:00 AM. This is done to enable the settlement of more transactions in order to reduce the NEFT settlement time; thereby making it more convenient for the users.
It must be noted that all NEFT transactions that take place at the normal bank working hours are considered to be automated transactions that are initiated through ‘Straight Through Processing’ (STP) modes by the banks.
When can you Make NEFT Transactions?
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 timings 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, 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 to make Transactions 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
How much are the 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.
Why is NEFT the most Preferred Mode of Fund Transfer?
NEFT is known to be one of the most preferred modes of fund transfer for the following reasons-
- 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