NEFT vs RTGS: What’s the Difference?

With the introduction of online modes of payment, and increased technical usage among the users, transferring funds from one bank account to another has become almost like a piece of cake. Users can choose any one of the various modes of payment depending upon the amount to be transferred, the time duration in which it should be credited to the receiver’s bank account, etc.

NEFT and RTGS are two of the many methods of fund transfer available to the users. Both these methods have their own advantages and disadvantages and are suitable for all users, depending upon their requirements.

This blog focuses on the differences between NEFT vs RTGS as modes of fund transfer and explains which one you should choose and why!

Understanding NEFT- National Electronics Funds Transfer

Regulated by the Reserve Bank of India, NEFT or National Electronic Funds Transfer is an electronic method of transferring money online. Most Indian banks provide the NEFT feature on internet banking and mobile banking. Money transfer made through NEFT does not require any additional transaction costs. Transactions made through NEFT are processed in separate batches. The RBI has specified a cut-off within which these transactions are settled.

  • 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

Understanding RTGS- Real-Time Gross Settlement

RTGS stands for Real-time Gross Settlement, meaning that through this method, the money is transferred from one bank account to the other in real-time, without any delay. RTGS works out as the best payment method if you need to transfer an amount equal to or more than Rs. 2 lakh in real time. RTGS does not follow any specific processing method unlike NEFT; hence, the funds are settled in real-time, without any delay. Through RTGS, each transaction gets processed with every instruction, which makes the money transfer process easier and faster.

  • Transactions made through RTGS are processed on a one-to-one basis

  • RTGS facility can be accessed at any time, on any day of the year

  • The Real Time Gross Settlement method is mostly used for transactions of high value

  • The RTGS service can be used using both online and offline modes

  • To process transactions through RTGS, the following details must be provided-

    • Amount to be transferred

    • Bank Account number

    • Beneficiary’s name

    • Bank’s branch

    • Beneficiary’s IFSC

    • Beneficiary’s bank branch

Difference between NEFT vs RTGS

The following are the key differences between NEFT and RTGS-

Point of Difference



Minimum Amount to be Transferred

Re. 1

Rs. 2 Lakh

Maximum Amount to be Transferred

No limit

No limit

Type of Settlement

Amount settled in batches

Amount settled one-on-one

Settlement Time

2 hours


Transfer Timings

24*7, all 365 days

Varies from bank to bank

Mode of Transfer

Both- online and offline

Both- online and offline

Additional charges

No charges applicable

Rs. 30 on outward transactions between Rs. 2 lakh and Rs. 5 lakh; Rs. 55 on outward transactions of more than Rs. 5 lakh

Charges on Transactions: NEFT vs RTGS

Additional Charges on NEFT Transactions-

NEFT transactions involved the following additional charges as money transfer fee until December 2019-

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.

Additional Charges on RTGS Transactions-

The following charges are applicable on transactions made through RTGS-

Type of Transaction

Charges Applicable

Inward transactions

No charges

Online transactions (Internet/Mobile Banking)

No charges

Outward transactions (amount = Rs. 2 lakh – Rs. 5 lakh)

Rs. 30

Outward transactions (amount < Rs. 5 lakh)

Rs. 55

NEFT vs RTGS: Which is Better?

Looking at the above-mentioned differences, it is evident that NEFT and RTGS are two majorly different modes of fund transfer. While NEFT has no minimum or maximum limit on the amount to be transferred, RTGS transactions can only be performed if the amount to be transferred is equal to or more than Rs. 2 lakh. Similarly, NEFT transactions take around 2 hours to be processed, while RTGS transactions are processed immediately.

So, if you are to make a choice between both these payment options, you can choose any one on the basis of your requirements explained as below-

  • You may go for NEFT as the mode of fund transfer if you have to transfer a small amount and there is no urgency for the completion of the transaction

  • Alternatively, if you wish to transfer a huge amount of money and on an immediate basis, then RTGS should be your preferred mode of fund transfer

To Conclude:

Irrespective of whichever method you choose, it is important to note that both these methods are equally safe and secure and are governed by the Reserve Bank of India. Both, NEFT and RTGS are reliable payment systems that support the digital, cashless initiative in building an advanced economy in the country.

What are the NEFT timings?
Until December 2019, NEFT transactions could be performed only between 8:00 AM and 6:30 PM from Monday to Friday, and between 8:00 AM and 12:30 PM on Saturdays. NEFT transactions cannot be performed on Sundays. However, starting January 2020, NEFT transactions can be performed at any time, on any day and from anywhere.
What is the NEFT transfer limit?
There is no limit on the minimum amount or maximum amount that can be transferred via NEFT. However, if you make NEFT transactions through cash, then the maximum amount that you can transfer is Rs. 50,000.
Are NEFT transactions chargeable?
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.
What are RTGS timings?
The timings during which you can perform RTGS transactions vary from bank to bank. It is, therefore, advised that you get in touch with your respective bank to find out the exact RTGS timings.
What is the RTGS transfer limit?
The minimum amount required to perform an RTGS transaction is Rs. 2 lakh.
Are RTGS transactions chargeable?
There are some additional charges on outward RTGS transactions. For instance, you may have to pay an amount of Rs. 30 on outward transactions between Rs. 2 lakh and Rs. 5 lakh and Rs. 55 on outward transactions of more than Rs. 5 lakh.
Which is the better mode of fund transfer- NEFT of RTGS?
Both of these modes have their own advantages and disadvantages. If you wish to transfer a huge amount of money on an immediate basis, then you should opt for RTGS as the mode of funds transfer. On the other hand, if you wish to transfer an amount lesser than Rs. 2 lakh, without any urgency, then you can opt for NEFT as the mode of fund transfer.
You May Also Like
Read More
How to Use UPI to Transfer Funds?
The facilitation of UPI, explained as Unified Payment Interface has eased the financial lives of more people than…
Read More
NEFT: What is it and How it Works?
NEFT stands for National Electronic Funds Transfer. Started in November 2005, NEFT is an electronic funds transfer system…
Read More
RTGS: What is RTGS?
RTGS stands for Real Time Gross Settlement. It is a money transfer system that allows the transfer of…
Read More
Money Transfer: All You Need to Know
Money transfer basically refers to the electronic transfer of money, initiated by one person to the other. With…