NEFT and RTGS are two systems of interbank transfer maintained by the Reserve Bank of India. NEFT stands for National Electronic Fund Transfer, and it operates on a Deferred Net Settlement basis, settling fund transfer transactions in batches. On the other hand, RTGS stands for Real-Time Gross Settlement, and it processes funds transfer instructions in real-time on an instruction-by-instruction basis. The settlement of funds transfer instructions occurs individually on a gross settlement basis. RTGS is the fastest possible interbank money transfer facility available through secure banking channels in India.
The main differences between NEFT and RTGS are as follows:
- NEFT operates in half-hourly batches, while RTGS processes transactions in real-time on a transaction-by-transaction basis.
- NEFT has no minimum or maximum limit on the amount to be transferred, while RTGS transactions can only be performed if the amount to be transferred is equal to or more than Rs. 2 lakh.
- NEFT transactions take around 2 hours to be processed, while RTGS transactions are processed immediately.
Both NEFT and RTGS are suitable for different types of transactions, depending on the amount to be transferred, the time duration in which it should be credited to the receivers bank account, and other factors.
