Difference Between EFT and RTGS

Banks are the licensed financial institutions that help customers in saving as well as lending money. Banks play a vital role in the lives of people by offering support to individuals as well as businesses.

The financial services offered by the bank’s help people manage lives effectively. To sustain the business due to competition, banks offer attractive services to attract customers.

Electronic Fund Transfer (EFT) and Real-Time Gross Settlement (RTGS) are two different mode of money transfer from one to one or another financial institution. Both these terms are related to the electronic money transfer system from one bank to another bank.


The main difference between EFT and RTGS is that EFT transaction is settled individually on any amount and there is no minimum value of amount whereas RTGS transaction mainly focusses on the big value of amount and settled in real-time.


Electronic Fund Transfer (EFT) is a settlement scheme under which the settlements happen in a batch process, at the end of the day. Real-Time Gross Settlement (RTGS) As the name indicates, a settlement in RTGS is done on a real-time.


Comparison Table Between EFT and RTGS (in Tabular Form)

Parameter of ComparisonElectronic Fund Transfer (EFT)Real Time Gross Settlement (RTGS)
Amount LimitThere is no limit – for minimum amount – Maximum amount limited to per transaction is Rs.50000 within IndiaThe minimum amount to be remitted through RTGS is Rs 2 lakh
SettlementTransactions are processed and settled in batches, at the end of the dayTransactions are processed and settled in real time and on gross level
Money transfer Suitable forUsually small value transactionHigh value transaction
ProcessingCompare to RTGS slowFast as it settled in real time
Business HoursOn all working days except bank holidays, 12 settlement in a working dayOn all working days except bank holidays, Continuous settlement.


What is EFT?

Transferring money from one bank account to another in an electronic mode is called Electronic Fund Transfer. The bank accounts may belong to the same or different banks.

Electronic Fund Transfer is also done through the ACH network. Electronic Funds Transfer is considered secured because of the usage of PIN (Personal Identification Number) and the login details which is known only to the customer.

Also, the manual intervention of someone depositing the cheque and its clearance is avoided. There are very less administrative procedures which save a lot of time and energy.

There are many ways to transfer money electronically, EFT includes Direct deposit, Wire transfers, ATMs, Debit cards, Electronic checks, Pay-by-phone systems and online banking.

Normally, cannot stop an EFT payment after initiating it, in case need to stop payment or refund amount then it’s between you and the person paid. However, we might able to stop scheduled payment such utility bills, recurring by notifying the financial institution to begore 3 business working days.

Before initiating EFT, payment or using it check with the bank or financial institution for policies, stop payment details, applicable charges for each transaction, minimum and maximum amount and business hours of the transaction.

electronic fund transfer

What is RTGS?

RTGS is one of the fund transfer systems which facilitates the real-time transfer of funds. RTGS is considered to be the fastest fund transfer method offered by the banks.

It is an instant transfer and the bank that is supposed to receive the funds from the remitting bank, has it remitted in seconds. It is expected of the bank to deposit the funds within 30 minutes of the transfer message.

RTGS also allows to set up the transfer at a later point in time. The value date of the transaction shall be analysed and the transfer is made from the queue.

There may be rare cases of funds not getting credited to the said account. In such cases, the funds shall reach the remitting bank.

rtgs 1

Main Differences Between EFT and RTGS

  1. The main difference between EFT and RTGS, is that EFT is based on net-settlement, meaning that the transactions are completed in batches at specific times, all transfers will be held up until a specific time. While RTGS is real-time and happens individually.
  2. EFT usually involves smaller value transactions and the maximum amount can be 2 Lakhs INR for the transactions. Whereas RTGS’ minimum value for transaction starts from 2 Lakhs INR.
  3. The process of EFR is one working day, while RTGS processes in real-time (‘push’ transfer) EFT is slower, fewer transaction charges compared to RTGS.
  4. EFT is best for small value transactions and RTGS which is appropriate for a large amount of transactions.
  5. EFT takes time to transfer funds and it depends on the bank’s transaction timelines, but RTGS is an instant fund transfer mechanism.



EFT and RTGS are considered safe and convenient for transactions. Still, it is advised by the financial experts to be cautious while transacting electronically.

EFT and RTGS make it a more convenient way of transferring or receiving funds from anywhere in the country. The trend has remained the same for these two payment systems although there has been good growth in volumes.

The nature of business of these categories of banks such as public sector banks, private sector banks, co-operative banks and foreign banks gets reflected in the difference in volumes of transactions.


  1. http://www.ijrra.net/Vol2issue3/IJRRA-02-03-26.pdf
  2. https://krishikosh.egranth.ac.in/handle/1/5810055874
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