Difference Between EFT and NEFT

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 wait 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 the 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. 


The main 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. 



Comparison Table Between EFT and NEFT (in Tabular Form)

Parameter of ComparisonEFTNEFT
ExtensionEFT is effective to transfer 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 done 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 branches of a financial institution or they can be branches of two different banks.

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

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

The popular EFT program is a direct deposit. It is the major method using 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 and 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 fulfill 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 Fund Transfer depends on factors such as the type of payment, the service provider, as well as the time of the submission of the payment.

electronic fund transfer

What is NEFT?

NEFT (National Electronic Fund Transfer) is a type of 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 that is participating in the NEFT system can transfer the funds with any similar kind of clients who are possessing accounts in the banks that are participating in the NEFT system.

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

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

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

national electronic fund transfer

Main Differences Between EFT and NEFT

  1. The main difference between EFT and NEFT is when EFT is applicable for both domestic and international transferring of funds whereas NEFT is valid only within India.
  2. Most kinds of 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 the online facility to make 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.



Banking and fund transfer are inevitable in our everyday life. Safe and efficient fund transferring methods are essential to make these transactions.

The doors opened by the computerized banking methods are enormous that make the financial transactions, bill payments, and shopping, more digital, secure, and faster.


  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
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