Banking sector has seen groundbreaking innovations in recent times. With every passing year, there is a new and much simpler method to transfer money between accounts. IMPS, NEFT and RTGS are such innovations that made transactions convenient and hassle-free.
However, not many are aware of the differences between them. So, in this article, we will give a detailed explanation of IMPS, NEFT and their differences. Read on!
IMPS is a nationwide payment system that the NPCI (National Payments Corporation of India) maintains. IMPS works as a deposit account for consumers and a demand draft for merchants in the country. The IMPS is a faster way of sending money from one person to another without posting cheques.
IMPS is a hassle-free, no-fuss payment system. There are no bank account details required to transact through IMPS and it can be used to transfer money either between individuals or to corporate entities too. Once you know the MMID of an individual, you can do an IMPS money transfer between them easily.
IMPS transactions can only be conducted by way of IMPS P2P(person-to-person) and P2A(person-to-account) transfers. These are different in the sense that P2A (Person to Account) transfer is a procedure where the receiving account details are all that is required while the transaction happens in real-time through internet banking.
This method requires MMID and it can be used for sending money to any recipient’s bank account quickly, regardless of whether they have an MMID or not.
In contrast, IMPS P2P transfer is person-to-person and only requires account details such as bank account number/IFSC, etc., for receiving the money. This option works best for those who want to send money fast, anywhere in the world
National Electronic Fund Transfer, or NEFT for short, was developed by the Reserve Bank of India (RBI). It is a mode of online fund transfer between banks that has the same functions as bank deposits. NEFTs can be initiated using your debit card, net banking or NEFT online payment. The funds are typically credited to your account in 1-2 business days following a transaction if everything has been done correctly and there are no issues. You can transfer money via NEFT between two separate branches and among several banks all around the nation. To be able to transfer money to someone else, you must ask your bank to enable the NEFT service on your account.
NEFT is a popular method of transferring funds within the country or overseas. The message from the originating bank is sent to a pooling center, known as NEFT Service Center. This message is now forwarded to the NEFT Clearing Center, operated by the National Clearing Cell of the RBI.
The cell then sorts the recipient banks for money transfers and performs accounting to collect cash from the sending banks. Banks that initiate debits are known as remitter banks, and those that initiate credits to recipients' accounts are known as destination banks. Through each NEFT Service Center, a remittance message is sent from the sender's bank. To carry the credit forward, the Clearing Center transmits inward remittance messages to the recipient banks.
|
IMPS |
NEFT |
|
|
Maximum Fund Transfer Limit |
2 lakhs |
No specific fund limit |
|
Minimum Limit |
1 Rupee |
1 Rupee |
|
Transfer Availability |
Available 24 x 7 |
Service available 24 x 7 |
|
Funds Processing Time |
Immediately |
Takes up to 2 hours |
|
Services |
Only online service is available |
NEFT works both online and offline |
|
Charges Per Transaction |
IMPS charges depend on the bank and are very low |
Online transactions are not chargeable. Offline transactions are chargeable |
|
Regulated By |
RBI |
NPCI |
|
Settlement Method |
Direct transfer |
The funds go through pooling and clearance centers |
Financial freedom is necessary for all. You have a wide range of options for how you want to send your money. To transfer money to any Indian bank account, use NEFT or IMPS. Both NEFT and IMPS are effective payment methods. Although IMPS has a restriction, it can be used for instant transfers. You can use NEFT to send higher amounts of money. You should also compare the fees you pay for various types of transactions.
The reality is that each banking solution satisfies a different set of needs and demands from the clients and those who benefit from them. The transfer's goal and your needs will ultimately determine the payment option that works best for you.
Ans: IMPS enables instant money transfers, and customers can use this service on weekends and legal holidays. Because of this, this service is considered to be better than NEFT and RTGS.
Ans: IMPS, as opposed to NEFT, is a real-time fund transfer service. The transactions are handled right away. However, the NEFT time is dependent on the banks' cut-off times and batch sizes. In most cases, it is finished in two hours.
Ans: Yes. Consumers can send upto 5,00,000 in a day to other accounts via IMPS. The service is available 24/7 making it easily accessible.
Ans: There is no limit for transactions through NEFT. However, each bank has a specified limit for their NEFT services. It also depends on the mode of transaction.
Ans: Verify whether your funds have been deducted from the account if your IMPS transaction times out or fails. You can wait a short while before making another transaction if the money is not deducted. Alternatively, if the funds are debited from your account, check your account two working days later.
Ans: Most banks in India offer IMPS or NEFT services. While some banks offer both, others have either of the services. However, some banks have neither. You need to check with your bank before availing these services.
Ans: You receive a notification via SMS or email following a successful NEFT/IMPS transaction. Additionally, you can access it by going into your net banking account or by using the mobile app. Since IMPS is an instant settlement payment mechanism, you receive a notification right away.
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