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 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 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 the ‘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 allow 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 the 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 fees-
|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 2020, 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.