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Yogi Zone

Useful articles for your finance management by our team of experts

Fund Transfer Charges of NEFT, RTGS and IMPS

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fundtransferBanking is an essential part of our lives and it has gone online just like everything else. There are still a lot of us who visit the banks for various services such as deposits, withdrawals, cheques, etc. Gone are those days when depositing amount in a friend/relative’s bank account would take a few business days. World is moving faster and now there are various methods for fund transfer to another account within no time. Let us view some of those methods along with the associated charges in this article.

NEFT

NEFT or National Electronic Funds Transfer system has been introduced by the RBI to make funds transfer between banks throughout India fast and hassle free. A bank branch has to be NEFT enabled for a user to be able to transfer funds to another user using this facility. Check the list of bank branches participating in NEFT.

The structure of charges that can be levied on the customer for NEFT is given below (as per RBI guidelines):

a) Inward transactions at destination bank branches (for credit to beneficiary accounts)
Free, no charges to be levied from beneficiaries

b) Outward transactions at originating bank branches – charges applicable for the remitter

- For transactions up to Rs 10,000: not exceeding Rs 2.50 (+ Service Tax)

- For transactions above Rs 10,000 up to Rs 1 lakh: not exceeding Rs 5 (+ Service Tax)

-  For transactions above Rs 1 lakh and up to Rs 2 lakhs: not exceeding Rs 15 (+ Service Tax)

-  For transactions above Rs 2 lakhs: not exceeding Rs 25 (+ Service Tax)

NEFT transaction timings for Monday – Friday is 8 A.M to 6.30 P.M and for Saturday it is 8 A.M to 12 P.M. There is no minimum and maximum limit for transfer.

RTGS

Real time gross settlement (RTGS) as defined by RBI is a continuous (real-time) settlement of fund transfers individually on an order by order basis (without netting). ‘Real Time’ means the processing of instructions at the time they are received rather than at some later time; ‘Gross Settlement’ means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis).

RTGS differs from NEFT in the settlement time. In the case of NEFT, there are batches defined for settlement and if a transaction crosses the stated time, it has to wait for the next batch to be processed. Transactions in RTGS are processed continuously throughout the working hours.

Minimum amount of transfer required for RTGS is Rs. 2 lakh. There is no upper limit, though.  The beneficiary bank has to credit the beneficiary’s account within two hours of receiving the funds transfer message.

RTGS transaction timings for Monday – Friday is 9 A.M to 4.30 P.M and for Saturday it is 9 A.M to 2 P.M. RTGS charges are as below:

a) Inward transactions – Free, no charge to be levied.

b) Outward transaction –  Rs. 2 lakh to  5 lakh – not exceeding Rs. 30 per transaction;
Above Rs. 5 lakh – not exceeding Rs. 55 per transaction.

IMPS

IMPS (Interbank Mobile Payment Service) is also known as immediate payment service. This might be a lesser popular service than the ones listed above. However, with mobile phone usage increasing day by day, transactions using this service is expected to be huge in the coming years. Users can transfer funds to their desired bank accounts through their mobiles which have internet access.

Unlike RTGS and NEFT, IMPS can be used 24*7 to transfer funds between bank accounts throughout India. Following are the charges for IMPS transactions (similar to NEFT):

- For transactions up to Rs 10,000: not exceeding Rs 2.50 (+ Service Tax)

- For transactions above Rs 10,000 up to Rs 1 lakh: not exceeding Rs 5 (+ Service Tax)

-  For transactions above Rs 1 lakh and up to Rs 2 lakhs: not exceeding Rs 15 (+ Service Tax)

Conclusion

All the above methods have a similar process. You need to first add the beneficiary bank account to your account first. Once it is activated, you can start transferring funds to the desired account. The charges given above are only minimum and maximum limits. Banks have their own charges within these limits. It is advisable to check the charges in the respective banks’ websites. These methods have been designed to provide comfort along with speed to the users. However, always exercise caution while dealing with bank accounts since a small mistake could dent you hard.

About the Author:

A.V.Suresh is our in-house Financial Planner and a personal finance enthusiast. He is a Certified Financial Planner(CFP) and also has an MBA in Finance. He can be reached at expert@investmentyogi.com

  • Bharath

    Very explanative article boss!
    If you don’t mind, i would like to suggest you to include technical terms definition like benificiary and benificiary bank, to provide more clarity.
    However, such terms can be understood using common sense also, and also no defect lies in your article, but for nil financial knowledge people, it will help a lot to more clearly understanding your article.
    Super work done! Keep on posting!

    • Av Suresh

      Thank you for your valuable suggestions Bharath. We will take it consideration in the upcoming articles. Keep visiting our portal.

  • Bhanuprakash

    Good Info about bank transactions

    • Av Suresh

      Thank you Bhanuprakash.

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