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What Is The Difference Between NEFT And ECS?


National Electronic Fund Transfer (NEFT) and Electronic Clearing Service (ECS) are two services that are almost similar to each other in many respects.


First, let us understand what an NEFT is? It is a type of payment that is again in electronic form and is effective across the nation.

What Is The Difference Between NEFT And ECS?
ECS on the other hand is also electronic and needs the clearing house to be involved.

Let us now look at the difference between NEFT and ECS:

1) NEFT and ECS Charges

The charges of NEFT vary from bank to bank. Let us take the case of Bank of Baroda. The bank charges an NEFT charge of Rs 10 for transactions upto Rs 50,000 and Rs 50,000 to Rs 1 lakh, the charges are Rs 25 per transaction.

This is for outward NEFT charges. There is no inward credit charges by all of the banks in the country.

The ECS charges are nil for most of the nationalized banks in the country. Our main sources was the RBI file for information on ECS charges and we do not know when it has been updated.


2) ECS more for repetitive transactions

Electronic Clearing Service, is more used for transctions that will be undertaken at regular periods.

For example, payment of electricity bills, telephone bills etc. You fill an ECS form and every month the amount is debited from the bank account.

The NEFT may not necessarily be for repetitive transactions. For example, they could be for one single transaction, which may never happen again.

3) Procedures are very different to each other

Another difference between the ECS and the NEFT is the procedure involved. In the case of the Electronic Clearing Service, you need to fill a form and get the manager to sign and approve your signature. The benefeciaries consent is necessary. For example, you will take the ECS form from the telephone company, get the bank manager to attest and then send the same back to your telephone company, wherein your account will be debited every month.

On the other hand in the case of NEFT, you can do it in two ways. The first is walk into the branch and get the National Electronic Fund transfer done, or do it online.

In the online mechanism, you first need to add a beneficiary. The bank may take some time to add a new beneficiary. After that you can proceed to make payment, whenever you wish.

4) Size of transactions

The size of the transactions would also differ from NEFT and ECS. For example, the National Electronic Fund Transfer is used to undertake large transactions.

On the other hand the Electronic Fund Transfer is used to complete small and frequent trsnactions like utility bills payments.

5) IFSC codes are needed

For NEFT, you need the IFSC codes, while in the case of ECS, since it is just a one time instruction, you need not bother too much.


Both the mechanism to credit and debit accounts are electronic ways of doing the same. This means they are safe and there is very little chance of theft and forgery.

Both are settled in batches of regular time intervals.

Read more about: ifsc neft ecs
Story first published: Tuesday, April 19, 2016, 12:44 [IST]
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