<<–2/”>a href=”https://exam.pscnotes.com/5653-2/”>p>NEFT and RTGS, including a tabular comparison, advantages, disadvantages, similarities, and FAQs.
Introduction
NEFT (National Electronic Funds Transfer) and RTGS (Real-Time Gross Settlement) are two electronic payment systems widely used in India for transferring funds between banks. While both serve the purpose of transferring Money, they differ significantly in their operational mechanisms, transaction speeds, and suitability for different types of transfers.
Key Differences Between NEFT and RTGS (Tabular Format)
| Feature | NEFT | RTGS |
|---|---|---|
| Processing Time | Batches at hourly intervals | Real-time, transaction by transaction |
| Settlement | Deferred net settlement (transactions settled in batches) | Gross settlement (each transaction settled individually) |
| Minimum Amount | No minimum limit | â¹2 lakhs (â¹1 for digital transactions) |
| Maximum Amount | No maximum limit | No maximum limit |
| Ideal for | Low-value and high-volume transactions | High-value and urgent transactions |
| Availability | 24×7, including weekends and bank holidays | Typically during Banking hours on weekdays |
| Charges | Relatively lower charges | Higher charges |
| Reversal | Possible, but may take time | Not easily reversible |
Advantages and Disadvantages
NEFT
- Advantages:
- No minimum or maximum transaction limit
- Available 24×7
- Relatively lower charges
- Disadvantages:
- Slower processing time compared to RTGS
- Transactions not processed in real-time
- Reversals can be time-consuming
RTGS
- Advantages:
- Real-time processing
- Ideal for urgent high-value transactions
- Ensures immediate availability of funds
- Disadvantages:
- Higher minimum transaction limit
- Not available 24×7
- Higher charges
Similarities Between NEFT and RTGS
- Both are electronic modes of fund transfer.
- Both are safe and secure methods regulated by the Reserve Bank of India (RBI).
- Both can be initiated online or through bank branches.
- Both require the beneficiary’s bank account details (account number and IFSC code).
FAQs on NEFT and RTGS
Is NEFT or RTGS faster?
RTGS is faster as it processes transactions in real-time, while NEFT processes in batches.Can I transfer money to any bank account using NEFT and RTGS?
Yes, both can be used to transfer funds to any bank account in India as long as the bank is a participant in the respective system.Are NEFT and RTGS safe?
Yes, both are considered safe and secure methods of fund transfer, regulated by the RBI.Can I reverse a NEFT or RTGS transaction?
NEFT transactions can be reversed, but it can be a time-consuming process. RTGS transactions, due to their real-time nature, are not easily reversible.Which is better, NEFT or RTGS?
The choice depends on your needs. If you need to transfer a large amount urgently, RTGS is the better option. If you have a smaller amount and time isn’t a constraint, NEFT might be more suitable due to its lower charges.
Let me know if you have any other questions!