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| December 27, 2021


Gone are the days when you’d have to go through a whole lot of processes to transfer money from bank to bank. Over the past few years, the banking environment has evolved from manual money transfer receipts to digital receipts. Electronic banking methods are fast, easy, and one of the most convenient ways of transferring or receiving funds; however, this has been taken up a notch higher with the introduction of digital money transactions. Amongst all the known digital money transfer facilities, the National Electronic Funds Transfer (NEFT), Real-Time Gross Settlement (RTGS), and Immediate Payment Service (IMPS) are the three most popular and commonly used services. They can be operated remotely through mobile banking or online banking facilities. Often users get confused about the differences between NEFT and RTGS and IMPS. Here is a handy guide explaining each of the money transfer facilities and also how they are useful to NRIs.

National Electronic Funds Transfer

National Electronic Funds Transfer or NEFT is a nationwide money transfer facility that enables users to send funds electronically from one bank account to another bank, provided the banks are operational in India. Even if the sender and receiver don’t have accounts in the same bank, NEFT money transfer is still possible. You just have to ensure that the banks are categorized under NEFT. The National Electronic Funds Transfer (NEFT) is managed by the Reserve Bank of India (RBI). The service can be availed by individuals as well as corporate firms. Using the NEFT service transfers up to INR 2,00,000 can be made.

Features of NEFT

Unlimited Transfers: You don’t have to worry about how many times you can use the NEFT service in a day. As long as you are transferring within the sanctioned limitations of NEFT, the number of transactions that you make is absolutely nothing to worry about. 

Convenience: The transactions are processed in a few minutes at the comfort of your home, office, or even shopping mall for that matter. You don’t have to visit the bank for transferring the fund. 

Always Available: Another feature of the NEFT facility is that it is 24x7 available. You can make the transfer at any time of the day effortlessly. 

Real-Time Gross Settlement

Real-Time Gross Settlement or RTGS is an electronic service for transferring funds, which is processed on an order-by-order basis. The RTGS process too is operated by the Reserve Bank of India; this money transfer facility has two elements associated with it. The first element is ‘real-time’, which refers to the continuous and 24-hour service while the second element is the ‘gross settlement’, which means the settlement that occurs on an instructional basis. The Real-Time Gross Settlement is primarily used for non-retail purposes and high-value transactions.

Features of RTGS

Real-Time Receipts: With the RTGS facility, the beneficiary bank instantly receives the transfer and the fund is transferred to the beneficiary account in 30 minutes. 

Wide Range: Along with transferring standard amounts, transactions starting from INR 2,00,000 and above are also possible. There are no specific limits to RTGS; however, the execution of a larger amount is done in batches basis the instructions. 

Extensive Coverage: The RTGS process can be used for trades, business transactions, commercial purposes, and much more. Using this, cash management, loans, tax payments, etc., can be simplified. 

Immediate Payment Service

Immediate Payment Service or the IMPS is an electronic banking service for retails, offering a nationwide bank-to-bank remittance facility. This service can be executed instantly and is available 24x7x365. The IMPS transfer can be operated through online banking, ATM, SMS, or mobile banking, at your comfort and convenience. It was started in 2010 by the National Payments Corporation of India (NPCI) and has become the most preferred money transfer facility ever since. Along with making the transfer of money from bank to bank, prepaid payment instruments (PPI) are also active participants of the IMPS facility provided they are facilitated by RBI.

Features of IMPS

Excellent Security: The Immediate Payment Service (IMPS) facility is designed with an enhanced security architecture that makes your transactions extremely secure. 

Two Methods for Remittance: With IMPS transfer, you can avail of two ways of remittance. The first one is using the account number and IFSC Code while the second one is transferring money through the beneficiary’s mobile number and mobile money identifier (MMID). 

NEFT vs RTGS vs IMPS: Which is the Best for Money Transfer for NRIs?

Transactions by NRIs are done for various purposes like savings, investments, support family, emergency funds, etc. Each of the above-mentioned money transfer facilities is designed to operate differently. Here is how NRIs can use the services based on their requisites. 

NEFT: NRIs can use the NEFT transaction facility for purchasing white goods; decorating their home, going for family vacations, and paying tuition fees.

RTGS: Since RTGS limits are high, it can be used for transferring larger amounts for expenses like buying a new car, down payment for booking a new flat, family wedding, and so on. 

IMPS: The Immediate Payment Service (IMPS) can be used for unforeseen situations like medical emergencies, meet sudden expenses for family events, and so on. The IMPS transfer comes in handy for fund arrangements in case of shortfall. 

To summarise the services, NEFT transaction is a retail online money transfer facility, whereas, RTGS is preferred for high-value gross settlement online. On the other hand, IMPS is a multiple-mode interbank money transfer service, where the transfer of funds is pretty instant. NRIs can use NEFT, RTGS, and IMPS depending upon their requirements or the occasions of money transfer.

Muthoot Finance is one of the leading non-banking financial corporations in India, offering a plethora of services like money transfer, loans, FOREX, etc. Our money transfer facilities are divided into three categories and customers can use domestic money transfer, international money transfer, and Indo-Nepal money transfer, as per their convenience.

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