'RTGS' stands for Real Time Gross Settlement and NEFT is short for National Electronic Funds Transfer. Both are used to transfer funds from one bank account to another within the same bank or a different bank within India.
Difference between Mode of Transfer
As the name indicates, in RTGS settlement is done on real-time (continuous) basis without netting. This means that an order is processed individually in an order by order basis.
'Gross Settlement' means the settlement of funds transfer instructions occurs on an instruction by instruction basis, so there is no waiting period.
A NEFT transfer on the other hand, is made in batches. When you transfer funds from one bank account to another after a batch is already initiated, your transaction will have to wait till the next batch is processed.
Individuals, firms or corporates maintaining accounts with a bank branch can receive funds through the NEFT system.
The timings, transaction limits and charges for RTGS and NEFT are decided by the Reserve Bank of India (RBI).
Difference in Transaction Limit
As per RBI instructions, for RTGS the minimum amount should be Rs 2 lakh. NEFT does not have a lower limit, which means you can transfer even one rupee to another account.
The is no maximum limit for both NEFT and RTGS through bank branches, however, if you choose to do it online, you can only transfer upto Rs 25 lakhs per customer ID per day.
Difference in Timings
Both NEFT and RTGS are not available 24/7.
The timings are restricted to:
- NEFT: 8 am to 6:30 pm from Monday to Saturday
- RTGS: 8 am to 4 pm from Monday to Saturday
Any transactions made online after the time limit will be processed in the next working day. Also, the service is closed on 2nd and 4th Saturday of the month and on bank holidays.
Difference in Charges Applicable on Transactions
RTGC and NEFT transactions made online are free from November 2017.
For transactions made in bank branches:
- Upto Rs 10,000: Rs 2.50 + GST
- Rs 10,000 to Rs 1 lakh: Rs 5 + GST
- Rs 1 lakh to Rs 2 lakhs: Rs 15 + GST
- Above Rs 2 lakhs: Rs 25 + GST
- Rs 2 lakhs to Rs 5 lakhs: Rs 25 + GST
- Above Rs 5 lakhs: Rs 50 + GST