How to Transfer Money through NEFT: Steps to Follow

NEFT is one of the most preferred modes of fund transfer from one bank account to another. This is because of the multiple benefits that it offers. The National Electronic Funds Transfer System allows its users to transfer funds online, at the comfort of their homes, along with the security promise of the Reserve Bank of India. The process of how NEFT transfers work and how one can transfer money through NEFT is crystal clear. This blog will further clarify on how you can transfer money through NEFT.

How to Transfer Money through NEFT?

The below steps explain how you can transfer money through NEFT-

  • 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

Why Transfer Money through NEFT?

The following reasons explain why you use NEFT as a mode of funds transfer-

  • 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

Conditions Applicable on NEFT Transactions

Even though any individual, corporate, firm, or company having NEFT-enabled bank accounts can transfer money through NEFT, it is mandatory for the user’s bank to be a part of the NEFT network. Additionally, it is a prerequisite for the user to have active internet banking status. It must also be noted that to perform any NEFT transaction, it is mandatory for the sender to know the receiver’s bank account details, contact details and the IFSC code.

When can you Transfer Money through NEFT?

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.

Is there any Transaction Limit to Transfer Money through NEFT?

The best thing about NEFT transactions is that there is no minimum or maximum limit to transfer money through NEFT. An individual can transfer as low as Re. 1 through NEFT. There is also no cap on the maximum amount that can be transferred through this mode of funds transfer.

However, it is important to note that while RBI may not have any limitations on NEFT amount transfers, specific banks may have imposed certain restrictions. For instance, Paytm Payments Bank allows its users to transfer Rs. 10 lakh per transaction through NEFT.

Are there any Additional Charges 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.

FAQs
What is NEFT?
NEFT or National Electronic Funds Transfer is a money transfer system that allows individuals to transfer money from one bank account to another, using both online and offline mediums. Among the other modes of money transfer, such as IMPS, RTGS and UPI, NEFT is the preferred method owing to its low processing cost, high NEFT amount transfer limit and fewer conditions on the transfer of funds.
How much additional charges are applicable 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.
In how much time do NEFT transactions complete?
NEFT transactions can take any time between 1 hour and 24 hours to get completed.
Is it safe to transfer money through NEFT?
Yes, it is absolutely safe to transfer money through NEFT. This is because NEFT transactions are performed under the complete supervision of the RBI and all rules and guidelines are laid down by RBI itself. This ensures complete transparency in the transactions.
How will I know if my NEFT transaction has completed or failed?
Once you initiate a NEFT transaction, you will be notified with this success or failure status via SMS or email on your registered mobile number or email id.
How do NEFT money transfers work?
As and when a user initiates a transaction through NEFT, it gets queued up. Every hour, these transactions are cleared in batches. It must be noted that 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.
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