written by | May 31, 2022

All About NEFT: Charges, Features, and Benefits

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Table of Content


National Electronic Fund Transfer or NEFT is an instrument through which anyone can transfer money to any place at any time. The Reserve Bank of India (RBI) regulates NEFTs. It is considered one of the safest and quickest ways to transfer money. The full form of NEFT is the National Electronic Fund transfer. You can send money from an NEFT-enabled bank to another bank. The facility of NEFT started in November 2005. As per the Indian Financial System Code (IFSC), the process takes place through net banking.

If you have started a new business or are just a student who needs to transfer money quickly to someone. You might be new to this process, but you need not worry here. We will elaborate on all major aspects of NEFT, like NEFT processing time, charges and how it works?

NEFT needs a certain amount of time to process. You can get this service in almost every bank, and the banks charge a nominal fee for their NEFT services. If you want to know all about them, consider reading this article.

Did you know?

NEFT started in November 2005 and was established by the Institute for Development and Research in Banking Technology. 

What Are the Features of NEFT?

  1. NEFT is considered a One-to-one payment facility.
  2. NEFT processes can take place between those banks which have NEFT facilities.
  3. NEFT takes some time to process. RTGS can be in real-time.
  4. It has a certain time slot. Before 2019, it took place between 8 a.m to 6:30 p.m. However, after 2019, the facility is now open 24X7.
  5. NEFT does not have any upper limit.
  6. Banks charge for these transactions. It depends on the amount. It starts from 2.5 rupees.
  7. NEFT transactions process settles in half an hour batch, as per RBI guidelines.

Also Read: What are the Different Digital Payment Methods?

How Does NEFT Work?

NEFT is an easy and convenient way to transact money. There is a certain process to applying for NEFT. In this section, we will be learning the process step by step.

  • First, you need to have the facility available for internet banking. To get the NEFT service, you need to log in with your user name and password.
  • After the login, you will land on the home page. You need to choose the ‘fund transfer’ option.
  • When you choose that option from the drop-down menu, you need to choose NEFT.
  • If you have not added any beneficiaries, add them first.
  • The information of the beneficiary, like name and account number and IFSC code, will be needed.
  • Putting all the information properly, next you need to confirm them.
  • Here an OTP will be sent to your registered mobile number.
  • When you put in the OTP, the process will start, and it will take at least 24 hours to add the beneficiary.
  • Within the time when the beneficiary will be added to your list, you can start another process. Here, the beneficiary is the person who is receiving the money.
  • Now you have to add the amount and confirm it.
  • After that, the amount will be transferred to the beneficiary’s account, and the money will be deducted from your account.

The Benefits of NEFT

  • Very economical way to transfer money.
  • One of the best-secured methods.
  • Cheques or demand drafts are not needed.
  • Physical appearance is not needed.
  • Online services
  • An easy and faster way.

NEFT Transfer Charges

Until 2021, NEFT charges for transactions were as follows:

Transaction Amount

Charges

Less than 10,000

₹ 2.5

The amount between 10,000 to 1 lakhs

₹ 5

Amount between 1 Lakhs to 2 Lakhs

₹ 15

More than 2 Lakhs

₹ 25

However, after January 2020, RBI instructed all the banks not to take any charges for NEFT. This initiative was imposed to promote digital transactions. It was declared that any savings bank account holder must not give extra charges for online money transactions through NEFT as online transactions are the safer and quicker way to send money.

NEFT Timings for Some Popular Banks

Banks 

NEFT Timing from Monday to Friday

NEFT time for Saturday

State Bank Of India 

8 a.m to 7 p.m

8 a.m to 1 p.m

HDFC Bank

8 a.m to 6:30 p.m

8 a.m to 6:30 p.m

ICICI Bank

8 a.m to 6:30 p.m

8 a.m to 6: 30 p.m

Citi Bank

8 a.m to 7 p.m

8 a.m to 1 p.m

Kotak Mahindra Bank

8 a.m to 6 p.m

8 a.m to 12 p.m

Bank Of Baroda

9 a.m to 6:45 p.m

9 a.m to 6:45 p.m

Yes bank

8 a.m to 7 p.m

8 a.m to 1 p.m

Union bank 

8 a.m to 6:30 p.m

8 a.m to 6:30 p.m

Punjab National Bank

8 a.m to 7 p.m

8 a.m to 1 p.m

As per RBI rules, banks are closed on the second and fourth Saturday and also on Sunday, so services are not available offline. Apart from that, the cut-off time may sometimes change, depending on the banks individually.

NEFT Holidays

Date

Holidays

26th January

Republic Day

1st April

Bank Closing day

15th April

Good Friday

3rd May 

Ramdan eid

15th August

Independence Day

2nd October 

Gandhi Birthday 

25th December

Christmas 

There is one thing to remember: if a person wants to transact money on a holiday, they can. The amount will be deducted from that person's account, but the beneficiary will not receive the money. On the next working day, the beneficiary's amount will be credited automatically.

Transfer Limit

NEFT is considered one of the easiest ways to transfer money. It is also an economical process. One of the major reasons to choose NEFT is that there are no extra charges. As per the RBI rules, the extra charges on the capital have been removed. It also means that there is no maximum or minimum limit for an NEFT transaction.

However, it should be remembered that according to the guidelines, there are no limits, but there are certain banks that have restrictions on limits.

Eligibility Criteria

There are certain banks that have NEFT services and can use NEFT. As a customer, those people who have a savings bank account in those banks can do NEFT transactions. People with no account in these banks also can transact through NEFT. In that case, the person needs to fulfil all the details in the form given by the bank.

Some Points to Remember

  • Any individual, corporate firm, or company that has NEFT enabled accounts in banks is eligible for the transaction.
  • The bank must be under the NEFT network to enable the NEFT transaction.
  • Users must have an internet banking facility from their account.
  • A user can transact only ₹ 50,000 in a day as per the time limit.
  • The sender must know the IFSC code and other bank details of the beneficiaries.

Also Read: All You Need To Know About IFSC Code

What Is RTGS?

If you are reading about NEFT, one term you must have heard very often is RTGS. It stands for real-time gross settlement. 

RTGS is a fund transfer system that enables an instantaneous transfer of money and securities. It settles the interbank payment based on the RBI guidelines. This system is usually used by the central banks for risk-free transactions.

Differences Between NEFT and RTGS

  • RTGS is Real Time Gross Settlement, whereas the NEFT is the National Electronics Fund Transfer.
  • There is no minimum limit of NEFT where an RTGS transaction needs 2 Lakhs as the minimum limit. In both cases, there is no maximum limit.
  • NEFT is open 24*7, where the RTGS depends on the bank's timing.
  • NEFT needs at least 2 hours for the process, whereas RTGS takes no time.

Conclusion

NEFT is one of the most popular methods to transact money. After abolishing the extra charges from the amount, it has become the most trusted and safest method to transaction money. Compared with other online methods like UPI or RTGS, it can not transact in real-time. It needs at least two hours to process the amount.
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FAQs

Q: Can anyone do NEFT?

Ans:

People must have accounts in the banks where NEFT is available.

Q: How much time is needed for the NEFT transaction?

Ans:

At least 2 hours are needed for the transaction.

Q: Does the bank deduct NEFT charges?

Ans:

As per the recent guidelines, there are no NEFT charges.

Q: What is NEFT?

Ans:

NEFT stands for National Electronic Fund Transfer.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.