NEFT vs RTGS: Difference and Comparison

Electronic transfer of money is growing rapidly due to its speed, safety, simplicity, and ease with the progress of technology.

/10

Finance Quiz

Test your knowledge about topics related to finance

1 / 10

What is the difference between a savings account and a checking account?

Savings accounts have a higher interest rate, checking accounts have lower fees

Checking accounts have a higher interest rate, savings accounts have lower fees

Savings accounts are for long-term savings, checking accounts are for everyday spending

Checking accounts are for long-term savings, savings accounts are for everyday spending

2 / 10

The appreciation in the value of security or asset is called as:

Current return

None of these

Capital return

Total return

3 / 10

If a bank thinks lending money to a certain business is risky it will:

Charge a lower interest rate

Charge a higher interest rate

Send the business packing

Think about it

4 / 10

What is a financial advisor?

A professional who provides investment advice on stocks only

A professional who provides tax advice on finances

A professional who provides legal advice on finances

A professional who provides advice and guidance on managing finances

5 / 10

The shares of well-established, financially strong and big companies having remarkable Record of dividends and earnings are known as:

Growth shares

Cyclical shares

Income shares

Blue chip shares

6 / 10

Which is not a cash activity listed on the cash flow statement?

Operating activities

Investing activities

Financing activities

Purchasing activities

7 / 10

Which one is/are financial assets?

bonds

machines

stocks

both a and c

8 / 10

The method of converting the amount of future cash into an amount of cash and cash equivalents value in present is known as:

Annuity

Compounding

Discounting

None of these

9 / 10

What is a pension plan?

A plan for paying off debt

A plan to pay for a child’s education

An investment plan for short-term goals

A savings plan for retirement

10 / 10

Share capital is

Money given to a company by shareholders in return for a stake in the business

Business borrowing capital from a financial institution

Capital shared amongst owners

Capital shared with shareholders

Your score is

Key Takeaways

NEFT stands for National Electronic Funds Transfer, while RTGS stands for Real-Time Gross Settlement.

NEFT is used for transferring funds up to a certain limit, while RTGS is used for transferring large sums of money in real time.

NEFT settles transactions in batches, while RTGS settles transactions individually and in real time.

NEFT vs RTGS

NEFT (National Electronic Funds Transfer) is a payment system utilized in India that enables individuals and businesses to transfer funds between banks electronically. RTGS (Real-Time Gross Settlement) is another payment system in India that allows for large-value real-time transactions.

Neft, also known as National Electronic Fund Transfer, is an online payment system. It lets the users transfer funds from one bank account to another.

RTGS is also known as Real-Time Gross Settlement. It is an electronic system that enables the transfer of funds in real time.

Comparison Table

Parameters of Comparison	NEFT	RTGS
Function	NEFT is an electronic system that enables the transfer of small to large sums of money across India.	RTGS is an electronic system that allows the transfer of large sums of money in real-time.
Transfer limit	It requires a minimum transfer value of Rs 1.	It requires a minimum transfer value of Rs 2 lakh.
Speed	It can take up to around 12 hours to complete a transaction.	In Rtgs, transactions happen within seconds. It is considered the fastest mode of transferring funds.
Usage	It is used for small transactions.	It is used mainly for transactions that are of high value.
Introduction	It was introduced in November 2005.	It was introduced in March 2004.

What is NEFT?

National Electronic Funds Transfer(NEFT) is an electronic system to facilitate the transfer of funds between two bank accounts.The process involved in the Neft transaction are:

Step 1: Use your login ID and password to log in to your online bank account.

Step 2: Go to the Transfer Section of the NEFT Fund.

Step 3: Enter the recipient’s name, bank account, and IFSC code.

Step 4: Start an NEFT transfer after the beneficiary is successfully added. Enter the amount and send.

The only requirement is that the depositor and recipient bank accounts should support NEFT transfer. NEFT transfer can be made by an individual, a firm, or a company.

NEFT transactions offer several benefits. Some of them include

Electronic transfer of funds, i.e., physical presence, is not required
Simple and easy to use
Quick and efficient as payment confirmation can be received through SMS or email within minimal time.
Minimal to no chances of fraud as it is a highly secure method.

What is RTGS?

Real-Time Gross Settlement(RTGS) processes the transaction in real time. Requirements of RTGS transactions:

Bank account
Minimum transaction limit of Rs 2 lakh
Transactions should be processed within India

Transfer of funds through online mode requires no additional charges. RBI, in July 2019, waived all the charges in RTGS transactions. The process involved in RTGS transactions through online mode:

Step 1: Log in to net banking

Step 2: Add details of the recipient account

Step 3: Go to the Transfer tab of RTGS Funds

Step 4: Choose the required amount to be transferred

Step 5: Accept the terms mentioned

Step 6: Send the online form for RTGS

Following the above-mentioned steps, it will enable the user to transfer funds hassle-free. RTGS transactions are managed by RBI, and hence once the transaction has been processed, it cannot be reversed.

Main Differences Between NEFT and RTGS

NEFT is slower than RTGS as NEFT transactions happen in hourly batches as opposed to real-time basis.
NEFT transactions operate 24*7, even on holidays, whereas RTGS transactions operate only during working hours.

References

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 ♥️

Facebook Tweet Pin Print Email

Chara Yadav

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.