EFT vs NEFT: Difference and Comparison

Banking has a significant role in our daily lives. With the emergence of online facilities, digital means are possible through all kinds of business and financial transactions.

With online cash transaction possibilities, the need for frequent visits and waiting in long lines to get the turn to do the transaction is no longer needed. EFT and NEFT are two of the online money transaction processes that are making tremendous advances in financial systems across the globe.

If one can avoid the hassles of using cash and check, it may save them a lot of time, and it is one of the reasons for people’s preference for EFT or NEFT over the traditional methods of cash transactions. 

Key Takeaways

  1. EFT is a generic term for electronic fund transfers, whereas NEFT is a specific Indian system for interbank transfers.
  2. NEFT operates in hourly batches, providing structured settlement cycles, while EFT methods can vary in processing time.
  3. NEFT transactions are limited to India, while EFT methods are used globally for various purposes, including international transfers.


The difference between EFT and NEFT is that through EFT, international fund transfer is possible, but NEFT is limited within the country. Both of these transactions have no upper limit. 


Banking Quiz

Test your knowledge about topics related to banking

1 / 10

What is the name of the type of loan used for financing the purchase of a car?

2 / 10

What is a credit score?

3 / 10

Which of the following is not a secured loan?

4 / 10

Which of the following is NOT a banking service?

5 / 10

What is an E-wallet?

6 / 10

What is the central bank in the United States called?

7 / 10

What is the name of the type of loan where the borrower can use the loan proceeds for any purpose, without specifying the end use of the funds?

8 / 10

Which of these is an International Financial Institution?

9 / 10

What is a balance transfer in the context of credit cards?

10 / 10

What is the full form of NPA?

Your score is




Comparison Table

Parameter of ComparisonEFTNEFT
ExtensionEFT is effective in transferring funds within and outside the country.Through NEFT, one can transfer funds only within the country.
Upper limitThe upper limit is depended on the issuing bank.No upper limit, but banks can determine the upper limit if needed.
MethodsDirect deposits, wire transfers, ATMs, debit and credit card transactions, mobile payments, e-checks, computer banking, etc.Can transfer money to a recipient and can pay credit card bills
Major BenefitDirect deposits like salaries of employees in an institution and all kinds of bill payments can be made by EFT.Secure and safe and fastest mode of transaction
TimingWorks every hour of the day.Works every hour of the day.


What is EFT?

EFT or Electronic Fund Transfer is a method to transfer money from one account to another. The two accounts among which the money is transferred can be of different financial institution branches or branches of two other banks.

EFT transactions are nothing but electronic banking. In this banking mode, all transactions are accomplished electronically, and using direct cash or paper checks is out of the question.

One can do EFTs due to the legal backup of the Electronic Fund Transfer Act (EFTA), which states the liabilities and rights of such kinds of fund transfers.

The popular EFT program is a direct deposit. It is the primary method for depositing salaries in employees’ bank accounts in companies, institutions, etc.

EFTs are administered utilizing the ACH (Automated Clearing House) system. This connects different financial institutions so a person can authorize the fund transfer electronically.

Most EFT transactions are free of cost, but some ATM transactions may require a small fee to fulfil the transaction.

The different types of EFT payments are listed below.

  1. Direct deposits
  2. Wire transfers
  3. ATMs
  4. Debit and Credit Cards
  5. Electronic checks
  6. Pay-by-phone systems, and
  7. Personal computer banking.

The processing time for an Electronic Funds Transfer depends on factors such as the type of payment, the service provider, and the time of the payment submission.

electronic fund transfer

What is NEFT?

NEFT (National Electronic Fund Transfer) is an online fund transaction initiated by the Reserve Bank in India. Through NEFT, one can shift money between banks within the country.

Individuals, companies, businesses, and firms that are maintaining accounts in a bank participating in the NEFT system can transfer the funds with any similar kind of clients who possess accounts in the banks participating in the NEFT system.

You can transfer any amount of money via NEFT with no predetermined upper limit. But certain banks have their upper limit, like the 25 lakhs decided by HDFC Bank.

NEFT fund transfer mode is an economical cash transaction method that works on a safe and secure platform. NEFT does not require a check or DD for money transfers as it uses digital means for the transaction.

NEFT is a faster and more convenient method of money transactions used in the country. Using NEFT, one can transfer money to a recipient and pay a credit card bill.

national electronic fund transfer

Main Differences Between EFT and NEFT

  1. The main difference between EFT and NEFT is that EFT applies to domestic and international transferring of funds, whereas NEFT is valid only within India.
  2. Most fund transfers are possible with EFT, but NEFT is mostly a deposit from the remitter account to the recipient account.
  3. A Bank should be NEFT enabled to make NEFT transactions. But EFT is only required an online facility to complete the transaction.
  4. Direct deposits are the most used facility of EFT that is most useful to provide salaries to the employees of a company or institution.
  5. Most EFT transactions are free of cost, but some ATM transactions may require a small fee to accomplish the transaction. NEFT transactions may need to pay a small fee when the transaction is between the branches of different banks.
  1. https://go.gale.com/ps/i.do?id=GALE%7CA537173130&sid=googleScholar&v=2.1&it=r&linkaccess=abs&issn=09762876&p=AONE&sw=w
  2. https://rrjournals.com/wp-content/uploads/2018/10/286-291_RRIJM18031054.pdf
  3. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1457862
One request?

I’ve put so much effort writing this blog post to provide value to you. It’ll be very helpful for me, if you consider sharing it on social media or with your friends/family. SHARING IS ♥️

Want to save this article for later? Click the heart in the bottom right corner to save to your own articles box!

Ads Blocker Image Powered by Code Help Pro

Ads Blocker Detected!!!

We have detected that you are using extensions to block ads. Please support us by disabling these ads blocker.