IMPS limit raised: How to choose the best mode to transfer money between NEFT, IMPS & RTGS

The Real Time Gross Settlement System (RTGS) for high-value transactions was made available round-the-clock in October 2020. The decision was made to facilitate swift and seamless payments in real-time for domestic businesses and institutions. Similarly, in 2019 the RBI had made the National Electronic Funds Transfer (NEFT) system available 24x7.

Over the years, it has getting easier to transfer money online. But which method should you choose to transfer your money to others? Banks provide several modes such as NEFT, RTGS and IMPS. Each of the transfer methods has different features. Based on the value of the transaction, the speed of transfer and other factors, you should decide the mode of transfer.

National Electronic Funds Transfer (NEFT): Using NEFT, you can electronically transfer money from your bank account to a person holding an account in the same or a different bank. Transfers happen in batches every half hour; they aren’t done in real time. The minimum transaction value is one rupee and maximum transfer limit varies with each bank. For instance, the maximum transfer limit is Rs 20 lakh per day at IDFC First Bank and at ICICI Bank it’s Rs 10 lakh a day.

NEFT transfers made through a bank’s mobile app or net banking facility do not attract any charges. But if you go to your branch to do a NEFT transfer, there are charges. For instance, ICICI Bank charges between Rs 2.25 to Rs 24.75 plus GST depending on the transaction value.

Real Time Gross Settlement (RTGS): In the RTGS process, the money is credited in the beneficiary’s account in real time, that is, immediately. The RTGS system is primarily meant for large-value transactions that require immediate clearing. It’s widely used by corporates and institutions for fund transfers on a real-time basis. The minimum amount that can be transferred through RTGS is Rs 2 lakh and maximum transfer limit varies with the bank, but there is no upper ceiling set by the RBI. For instance, the maximum transfer limit is Rs 20 lakh per day at IDFC First Bank and Rs 10 lakh for ICICI Bank.

There are no transaction charges for RTGS initiated through online modes (i.e. internet banking, mobile apps), but some banks charge fees for transacting through bank branches. For instance, ICICI Bank charges Rs 20 to Rs 45, plus GST, depending on the transaction amount.

Immediate Payment Service (IMPS): IMPS provides real-time fund transfer facility on online channels of banks such as mobile banking, net banking, through SMS and via ATMs. In the IMPS system, the National Payments Corporation of India (NPCI) facilitates the transfer of funds between member banks. The transfer from your account to the beneficiary account is instant. You will require the beneficiary bank account number and IFSC code to complete the transaction. You can transfer the amount using IMPS system throughout the year, 24/7. The minimum transaction value is Re 1 and the maximum amount that can be transferred is Rs 2 lakh. Soon, you will be able to transfer up to Rs 5 lakh as the limit is enhanced. At present, it’s widely used for small-value transactions by retail customers.

Depending on the bank, the transaction charges may vary. For instance, there are no charges for transferring using the IMPS method levied by IDFC First Bank, but HDFC Bank charges between Rs 3.5 to Rs 15, plus GST, depending on the transaction amount.

Why use IMPS when NEFT is also available 24/7?

With IMPS, transfer of funds happens instantly on a real-time basis using net-banking and mobile banking.

NEFT transfers happen in batches, every half-an-hour; it’s not in real time. If the beneficiary doesn’t need the amount instantly, you can use this method to transfer the funds. Also, you can use this method to transfer high-value amounts as the maximum transaction limit is set by the bank, which goes up to Rs 10-20 lakh.

What information is required when using the RTGS or NEFT funds transfer service?

The few essential details required are as follows: amount to be transferred (remitted), beneficiary customer’s account number, name of the beneficiary bank and branch, name of the beneficiary and the IFSC code of the beneficiary bank branch.

My bank account got debited while transferring via NEFT/RTGS/IMPS, but beneficiary account is not yet credited, will I get back the money? 

Yes. If the beneficiary’s bank is unable to get credited for any reason, the bank will return the money to the remitting bank within one hour. Once the amount is received by the remitting bank, it is credited to your account by the bank.