NEFT and IMPS are two types of RTGS systems based on the nature of fund transfers.
NEFT and IMPS is an electronic funds transfer system that facilitates person-to-person and bank-to-bank money transfer transactions between different bank accounts in India. IMPS and NEFT are exceptionally similar, yet they are different too.
Key Takeaways
- IMPS enables instant money transfer 24/7, while NEFT operates in batches during specified hours.
- IMPS offers real-time settlement of transactions, whereas NEFT has a delay due to its batch-processing nature.
- IMPS transactions have higher fees than NEFT, which offers more cost-effective transfers.
IMPS vs NEFT
IMPS (Immediate Payment Service) is a real-time interbank electronic fund transfer service that operates 24/7. This service allows users to transfer funds instantly to any bank account in India. NEFT (National Electronic Funds Transfer) is another electronic fund transfer system that operates on a deferred net settlement basis.
IMPS stands for Immediate Payment Service, where IMPS does not require registration. To initiate an IMPS, it requires only a mobile phone number.
The mode of authentication for IMPS is the bank’s mobile banking USSD application and IVR (Interactive Voice Response). NEFT is an electronic funds transfer system through which funds can be transferred from any bank branch to another in the same city and across the country, 24 hours a day.
NEFT transfers do not need any banking requirements and have no charges levied per transaction.
Comparison Table
| Parameters of Comparison | IMPS | NEFT |
|---|---|---|
| Definition | IMPS is a facility that enables a customer to transfer funds abroad electronically using the Internet or any mobile phone. | NEFT is a facility that enables a customer to transfer funds from one bank branch to another bank branch. |
| Obtainability | IMPS has the obtainability of any time throughout the year. | NEFT has the obtainability of only during functioning days. |
| Bank Transferability | IMPS transfers are instantaneous, as funds will appear in an account within 30 minutes of receiving a request. | NEFT money will be transferred from the sender’s bank account to the receiver’s bank account within a day or two. |
| Celerity | The celerity of IMPS is high. | The celerity of NEFT is high. |
| Transaction Restriction | IMPS has a transaction restriction of 1 lakh. | NEFT doesn’t have any transaction restrictions. |
What is IMPS?
IMPS stands for Immediate Payment Service. On this service, the money will be transferred from the sender’s bank account to the receiver’s account within a day or two.
For this type of transfer, there won’t be any charges as it is part of an Instant fund transfer scheme run by the National Payments Corporation of India (NPCI). Strong points for using IMPS are:
- The receiver can keep track of transactions because every transaction will show in his bank statement or account balance.
- All major banks accept this service.
- There will be an immediate effect as the money will reach the receiver’s account within 3-5 working days.
- The transfers are free of charge.
- There won’t be any charges for using this service from any person who has an account in India. However, there might be charges if the receiver is not in India.
IMPS does not require registration. Moreover, to initiate an IMPS, it requires only a mobile phone number, and the banks using this service are banks with an IMPS link.
With this service, the funds sent to the receiver will reach his bank account within 3-5 working days. Even if it is part of an Instant fund transfer, the receiver must be in India; otherwise, funds will be transferred to someone else’s account.
What is NEFT?
National Electronic Funds Transfer Service, In this service, money will be converted from the user’s bank account to the receiver’s bank account within a day or two.
Moreover, there won’t be any charges for using the NEFT facility for this type of transfer. However, the receiver must have an account in India.
Otherwise, the money will not be converted and will go to someone else’s bank account. NEFT is a virtual funds-carrying system that initiates person-to-person money conversations between bank accounts in India.
Moreover, the funds will be transferred as soon as the request is sent through the swift network, and funds will reach a bank account within fifteen minutes to an hour if the user is transferring in Indian Rupees or 24 hours if the user is transferring internationally.
The National Electronic Funds Transfer (NEFT) System offers the amenity of a user to electronically pass on money from his or her account to another account using internet banking, any other mobile application, or through a participating bank’s branch where NEFT transfers take two days to process.
Main Differences Between IMPS and NEFT
- IMPS has the potential to initiate the transfer of funds abroad virtually using the Internet, whereas NEFT has the potential to initiate transferring of funds from one bank branch to another bank branch.
- IMPS is on the market at any time throughout the year, whereas NEFT is on the market only during functioning days.
- IMPS bank transferability is instantaneous, whereas NEFT bank transferability will be fetched within a day or two.
- The promptness of IMPS is high, whereas the promptness of NEFT is high.
- IMPS has a transaction diminution of 1 lakh, whereas NEFT doesn’t have any transaction diminution.
- https://www.emerald.com/insight/content/doi/10.1108/JMD-04-2017-0144/full/html
- https://ieeexplore.ieee.org/abstract/document/9388452/
- https://ieeexplore.ieee.org/abstract/document/9388452/
Last Updated : 13 June, 2023
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
The content raises critical points about the speed, costs, and accessibility of IMPS and NEFT. A well-presented and informative piece.
NEFT may not be as fast as IMPS, but it is a more cost-effective option. There needs to be more focus on the fees associated with these services.
IMPS and NEFT both have their advantages and drawbacks. It’s important for individuals to weigh these factors based on their specific requirements before opting for either service.
As the demand for quick, efficient fund transfers continues to rise with the digital age, it’s clear that services like IMPS and NEFT are paramount. The table providing a comparison has clarified any confusion regarding these systems.
The comparison table is undoubtedly beneficial. I appreciate the way in which the differences have been outlined clearly and concisely.
IMPS is the future of money transfers. It’s fast, effortless, and reliable. I’m looking forward to it becoming even more widespread.
The detailed comparison between IMPS and NEFT in this article has been incredibly insightful, helping to better understand the differences between the two systems.
Absolutely, the article provides a thorough analysis. It’s crucial for individuals to be well-informed about these financial services.
Indeed, the comparison table was particularly useful. It makes it easier to grasp the distinctions between IMPS and NEFT.