Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) are payments facilities offered by banks for transfer of funds or money from one bank to another.
Real Time Gross Settlement (RTGS)
In RTGS the funds are processed on instructions at the time they are received rather than at some later time. Means money is transferred as and when instructions are received.
Also read: What is the Difference between RTGS and NEFT?
For large value transactions one needs to transfer through RTGS. The minimum amount to be remitted through RTGS is Rs 2 lakh. There is no upper ceiling for RTGS transactions.
The RTGS service window for customer's transactions is available to banks from 9 AM - 4 .30 PM on week days and from 9 AM to 2 PM on Saturdays.
National Electronic Funds Transfer (NEFT)
Individuals, firms or corporates having accounts with a bank branch can transfer funds using NEFT. While, there is no limit either minimum or maximum on the amount of funds that could be transferred using NEFT.
Presently, NEFT operates in hourly batches - there are twelve settlements from 8 am to 7 pm on week days (Monday through Friday) and six settlements from 8 am to 1 pm on Saturdays.
There are two ways in which we can transfer funds from one account to another. Let us understand how to transfer funds by online method.
Read more: How RTGS and NEFT fund transfer services can be availed offline?
How to transfer funds through RTGS and NEFT?
- To avail this service one needs to have net banking facility from its bank.
- Beneficiary needs to be added, before transferring the funds. One should make note of beneficiary account number, IFSC number, bank and branch name and name as per bank details.
- Proceeding will take 12-24 hours to authenticate given details of beneficiary. You will receive a message that beneficiary is been added and one can transfer funds easily.
How to transfer funds through RTGS and NEFT from SBI?
- Log on to www.onlinesbi.com
- In Profile tab and Go to Manage Beneficiary link.
- Select Inter Bank Payee from the options provided.
- Select 'Add' option and provide the Beneficiary Name, Beneficiary Account Number, Address and Inter Bank Transfer Limit in the relevant fields.
- Enter the IFSC code of the beneficiary bank branch by either:
- Selecting the Location option and then the Beneficiary Bank, State and Branch form the drop down menus provided.
- Click the 'accept Terms of Service (Terms & Conditions)' button followed by 'confirm'.
- A high security password is sent to the mobile number as an additional security measure. Enter this password to authorize the beneficiary.
- The beneficiary added is activated in a maximum of 16 hrs. time. Once activated you can transfer funds to the beneficiary.
- To remit funds to the Inter Bank Payee through RTGS / NEFT select the 'Inter Bank Transfer' link in the 'Payments/Transfers' tab.
- Select the Transaction Type - RTGS or NEFT.
- The list of beneficiary accounts added is displayed.
- Enter the Amount and select the beneficiary to be credited from the list.
- Click on 'accept Terms of Service (Terms & Conditions)' and confirm.
The process of online method will be more or less same and may vary depending on the bank.
Benefits of using the RTGS and NEFT mechanism
There are various benefts of using this mechanism to send and receive money. Among the few include that it is quick, though there is some amount of money that is involved, unlike cheques which are free from remittance charges. The other advantage is that the transfer through NEFT and RTGS is rather quick. Also, the chances of cheating through cheque fraud is eliminated. This is one reason why these methods of transfer are one of the favorite ways to send and receive money within India and also abroad.