NEFT is a system in India for online money transfers between banks without needing to be physically present. This article explains how NEFT works, who can use it, and what information is needed.
National Electronic Funds Transfer, or NEFT for short, is a nationwide payment system that makes it possible to transfer money between bank accounts. With the rising usage of Internet banking, NEFT transfer has become one of the most common ways to transfer money. The electronic nature of NEFT makes it possible to transfer money between any two bank accounts without going to the bank branch in person.
What Is NEFT Transfer?
The Central Bank of India, the RBI, has introduced the NEFT system as a mechanism for online fund transfers. It supports the quick transfer of money among banks in India. A bank branch must be NEFT-enabled so that a client can transfer the amounts to another party. NEFT Transfer could be used to make payments across India. It is run through the RBI, creating a centralized mechanism for payment that is significantly secure and simple to operate.
How Does NEFT Work?
NEFT Transfer is a user-friendly and hassle-free method for transferring funds. Follow these steps to transfer funds via NEFT:
- Log in to your Internet banking account.
- Click on the ‘Fund transfer’ option on the main page.
- Select ‘NEFT’ from the dropdown menu that appears.
- If you haven’t added the beneficiary to your account yet, you need to do so. To add a beneficiary, click on the ‘Add beneficiary’ option on the page.
- Enter the required information of the beneficiary, including their name, bank account number, IFSC code, etc.
- Click on ‘Confirm’ or ‘Add.’ To authenticate this step, an OTP will be sent to your registered mobile number, which you will need to enter.
- After confirming the details, the action will be processed. It may take up to 24 hours for the beneficiary to be added to your account.
- Once the beneficiary is added to your account, select their details from your list of beneficiaries.
- Enter the amount that needs to be transferred and confirm the transaction.
- Click on ‘Confirm’ and the funds will be transferred from your bank account to the recipient’s account.
Advantages of Using NEFT for Fund Transfer
NEFT Transfer offers numerous benefits. Here are some of them:
- Cross-border Transfer: Through the Indo-Nepal Remittance Facility Scheme, NEFT allows one-way cross-border fund transfers from India to Nepal.
- Interbank Transfer: No matter which bank branch is involved, interbank transfers make it simple to move money between any two bank accounts.
- Paperless Transfer: NEFT does away with the requirement for tangible items like checks to transfer money.
- No Physical Presence Required: To begin the transfer, neither of the parties involved in the transaction must be physically present at the bank.
- Convenience: NEFT is a quick and effective way to transfer money.
- Availability: Weekends and holidays are also acceptable days for NEFT money transfers.
- Location-independent: For NEFT transactions, Internet banking can be started from any location.
- Confirmation: Email and SMS alerts are used to notify users when a transaction has been confirmed.
- Real-time Transactions: NEFT guarantees real-time transactions, giving both parties to the transaction assurance.
Disadvantages of NEFT Transfer
- Through NEFT, funds are not immediately transmitted to the beneficiary.
- NEFT transactions may be subject to additional fees from some banks.
- NEFT is only applicable for domestic transfers of cash within India
- Since the NEFT transaction method is technical, not everyone may be able to use it.
Features of NEFT Transfer
- NEFT is an online money transfer method regulated by the RBI.
- It is a one-to-one payment facility.
- NEFT transactions can only be processed between banks that offer NEFT-enabled services.
- Transactions through NEFT do not occur in real-time and take a few days to complete.
- NEFT transactions were previously limited to specific timings, but can now be performed 24*7 since 2020.
- To transfer funds through NEFT, beneficiaries must be added to the internet banking portal of the required bank.
- There are no limits on the amount of NEFT transactions.
- Fees are applicable on all NEFT transactions, ranging from ₹ 2.5 to ₹ 25, depending on the amount transferred.
- Payments made through NEFT are processed and settled in batches of half-hour according to RBI guidelines.
What is NEFT Inward?
NEFT Inward, in the realm of banking, denotes the procedure of receiving funds through the NEFT (National Electronic Funds Transfer) service. According to the Reserve Bank of India (RBI) official website, NEFT is a payment system designed for one-to-one fund transfers. When an individual transfers funds to your account using NEFT, it qualifies as an NEFT Inward transaction, signifying that the money is moving from the sender’s account to yours.
If you lack a savings account, you have the option to deposit cash using the NEFT facility. Nevertheless, there is a cash remittance limit of ₹50,000 per transaction. Additionally, fund transfer requests are processed in batches, with settlements occurring every 30 minutes. These batch operations are active from 8 A.M. to 7 P.M. on all working days, excluding the 2nd and 4th Saturdays of each month.
The timing of the transfer initiation influences when the funds will be credited to the recipient’s account, with a maximum processing time of 24 hours.
Who Can Use NEFT Transfer?
Individuals, corporations, and businesses that have accounts with any bank are eligible for NEFT service. They can conduct business with other people, businesses, or corporations who have accounts with the same bank or any other bank via NEFT.
Details Required for Funds Through NEFT System
To transfer funds via NEFT, you need the following beneficiary details:
- Name
- Account number and type
- Bank name and branch name
- IFSC code of the branch
Operational Timings for Making NEFT Transfer
Previously, NEFT clearance was subject to the following slots, such as from:
- Monday through Friday, 8 a.m. to 7 p.m.
- Saturday, 8 a.m. to 12 p.m.
The RBI introduced new timings in 2019, under which the NEFT payment method is active and available 24 hours a day, 365 days a year. The goal behind the introduction of the new system is to encourage digital transactions and the worldwide integration of the Indian financial markets. An individual could place the request for NEFT at any time. The NEFT request would be sent to a queue. Each NEFT request in the queue would be cleared once an hour.
Time Required For NEFT (National Electronic Funds Transfer)
To comprehend the completion time of payment by NEFT, it is necessary to first examine the NEFT procedure. Initially, an NEFT is started once the needed information is provided by the user for the NEFT to be handled.
If after the completion of working hours of the bank, and National Electronic Funds Transfer is performed, the payment is started using the STP (straight-through processing) method. The status of NEFT can be tracked by the sender as well as the beneficiary by using the CFC (customer facilitation center) number, and you would be required to give the needed information for getting information.
Normally, it takes a maximum of two hours for payment by NEFT to transfer into the beneficiary’s account. However, in some situations, it might require more time. Along with this, it is good to track with CFC in the situation of subsequent suspensions.
Difference between NEFT, UPI, and RTGS
Parameters |
NEFT |
UPI |
RTGS |
|
Minimum Transfer Value |
₹ 1 | ₹ 1 | ₹ 2 lakh |
|
Payment Option |
Online and Offline | Online | Online and Offline |
|
Maximum Transfer Value |
No limit | ₹ 2 lakh | No limit |
|
Transfer Time |
Up to 30 minutes | Immediate | Immediate |
|
Service Time |
Available 24×7 | Available 24×7 | Available 24×7 |
|
Inward Transaction Charges |
No charges | No charges | No charges |
|
Details Required |
Account No. and IFSC Code | VPA of beneficiary/QR code/Account No. and IFSC | Account No. and IFSC Code |
|
Beneficiary Registration |
Yes | No | Yes |
Charges Applicable on NEFT Transactions
Individuals receiving transfers are not charged, and neither are online transactions made through mobile or Internet banking subject to NEFT fees. However, if you are the one initiating the fund transfer, you will need to pay certain fees to facilitate it.
| Amount of Transfer (in ₹) | Transaction Charges (in ₹) |
| Up to 10,000 | ₹ 2.5 + GST |
| 10,000 – 1 lakh | ₹ 5 + GST |
| 1 lakh – 2 lakhs | ₹ 15 + GST |
| More than 2 lakhs | ₹ 25 + GST |
Since NEFT fees vary between banks, it is advised that you contact your bank to learn more. For transactions up to 10,000, some banks impose a fixed rate of 2.5, but others may tack on charges. Some banks offer free NEFT transfers inside the same bank, depending on your account type, which adds further ease.
Use of NEFT Transfer
In India, NEFT is regarded as the best economic mechanism for transferring funds; however, in situations in which
- Any individual, organization, or company has a bank account that is supported by NEFT.
- The NEFT network includes the user’s bank and financial institution.
- The Internet banking of the receiver must be activated.
- The bank account number, IFSC code, location of the branch, and some other information about the receiver shall be shared. If such details are not recognized or incorrect details are input, the payment may not be performed.
- The NEFT payment shall be within the limits prescribed under banking norms. Though there is no limitation on the extreme amount as per the guidelines of the RBI, banks have been permitted to determine the maximum amount to confirm security for their consumers.
How to Make an NEFT Transfer Online
Here are the steps to transfer funds through NEFT online:
- Log in to your net banking account
- Click on the ‘Fund Transfer’ option on the main page
- From the drop-down menu, select ‘NEFT’
- If you haven’t already, add the beneficiary to your account. To add a new beneficiary, click on the ‘Add beneficiary’ option displayed on the page
- Enter the beneficiary’s details, such as the name, account number, IFSC code, etc.
- Tap on ‘Confirm’ or ‘Add’
- An OTP will be sent to your registered mobile number for authentication
- After authentication, the action will be processed, and it may take up to 24 hours to add the beneficiary
- Once the beneficiary is added, select the beneficiary you wish to send money to from your list of beneficiaries
- Enter the amount you wish to transfer and confirm the transaction
- After you confirm, the amount will be transferred from your bank account to the beneficiary’s account.
How to Transfer Funds Through NEFT Offline
You must complete an offline NEFT form at your bank’s branch to start an offline NEFT transaction. The form is filled out with all pertinent information, including the account number, account name, IFSC code, branch name, bank name, and account type for both parties, and it is then given to a banking representative for processing. Observe the following supplementary information:
- When completing the form for an offline NEFT transaction, the remitter must provide both their personal information and the beneficiary’s information.
- The sender must present their PAN card while starting the transaction if the transaction amount is more than 50,000.
How to Pay Credit Card Bill using NEFT
Here are the steps to follow to make a fund transfer to your credit card using NEFT:
- Step 1: Log in to your bank’s Internet banking account.
- Step 2: Add your credit card as a beneficiary. You will need to know the IFSC code for your credit card in order to do this.
- Step 3: Enter your credit card number as the account number, along with other relevant details.
- Step 4: Once your credit card is registered as a payee, go to the ‘NEFT Funds Transfer’ option and transfer funds to your credit card by entering the bill amount.
How to Add Credit Card as a Payee/Beneficiary for NEFT Credit Card Bill Payment
| Step | Detail | Process |
| 1 | Payee Name | The payee or beneficiary name must match the name that is printed on the credit card. |
| 2 | Payee Account Number | The credit card number can be found below the name of the cardholder. |
| 3 | Bank Name | The name of your bank |
| 4 | IFSC Code | The credit card number can be found below the name of the cardholder. |
How to Track NEFT Transaction Status
- Both the sender and the beneficiary may get in touch with the NEFT Customer Facilitation Centre of the relevant bank to inquire about the progress of the NEFT transaction.
- On the website of the relevant bank, you can find information on the NEFT CFC.
- The consumer must give the bank certain transaction information, such as the Unique Transaction Reference (UTR) number or transaction reference number, the date of the transaction, etc., for the bank to monitor the transaction swiftly.
Chances of Failure of NEFT Fund Transfers
Although NEFT is a dependable and secure means of transferring funds, it can encounter failure due to the following factors:
- Inadequate funds in the sender’s bank account
- Incorrect bank information for the recipient
- Technical malfunctions
- Discrepancies in the sender’s account name
- The beneficiary’s bank account is not being connected to the NEFT network.
Consequences if the Money Is Not Transferred to the Account of the Beneficiary
If the funds are not transferred to the account of the receiver due to any cause, the bank must give back the money to the transmitter as soon as possible. If it is not also executed within two hours of the deferral, the banking organization is obligated to make payment of interest to the person who is influenced through the delay following the RBI’s directions.
The RBI LAF Repo Rate is implemented for the penalty, plus an additional 2% for suspension until the time the amount is credited to the beneficiary’s account. Clients could rapidly get their complaints for any payment addressed with the CFC or register grievances with the RBI Integrated Ombudsman Scheme. If, within 30 days, grievances are not addressed, customers can file complaints.
Conclusion
Thus, NEFT is considered one of the most convenient ways to send and receive money, and there is no timing for NEFT according to the latest mandate. Therefore, even on holidays, anyone could make an NEFT transaction. NEFT Transfer is a swift and cost-effective method, allowing any local fund transfers to be executed easily.
FAQs
What is NEFT?
NEFT stands for National Electronic Funds Transfer and is an electronic payment system used for transferring money between bank accounts.
What are the NEFT Timings?
Prior to December 2019, NEFT transactions were only available on weekdays from 8:00 AM to 6:30 PM and on Saturdays from 8:00 AM to 12:30 PM. NEFT transactions were not available on Sundays. However, from January 2020, NEFT transactions can be performed anytime, any day, and from any location.
Is it important to add a beneficiary to send money through NEFT?
It is essential to add a beneficiary to your internet banking account to transfer money through NEFT. Adding a beneficiary should be done beforehand as it takes approximately 24 hours for the beneficiary to be added to your account before initiating the transfer process.
What is the NEFT Transfer Limit?
NEFT allows for both minimum and maximum amounts to be transferred without limit. However, cash-based NEFT transactions are limited to a maximum transfer amount of ₹ 50,000.
How much time does it take to settle NEFT Transactions?
NEFT transactions can be settled within 24 hours, but the time required for settlement may differ from bank to bank.
Are NEFT Transactions Chargeable?
NEFT transactions incur a fee. For transfers between ₹ 1 and ₹ 10,000, a fee of ₹ 2.5 will be charged. For transfers between ₹ 10,000 and ₹ 1 Lakh, a fee of ₹ 5 will be charged. If the transfer amount is between ₹ 1 Lakh and ₹ 2 Lakh, a fee of ₹ 15 will be charged. A fee of ₹ 25 will be charged for transactions equal to or greater than ₹ 1 Lakh.
Is IFSC code a must for all NEFT Transactions?
Yes, providing the IFSC code along with other necessary details is compulsory to initiate fund transfers.
Do all banks have a NEFT facility?
Not every bank is included in the NEFT network.
Is NEFT transfer Immediate?
Yes, NEFT transfer is a prompt and instantaneous transaction facility that is a part of the Indian electronic fund transfer system. It allows for immediate transfer of funds to the receiver's bank account and is available for consumers 24/7. The abbreviation for National Electronic Funds Transfer is NEFT.
What is the difference between NEFT & RTGS?
RTGS, which stands for Real-Time Gross Settlement, is a system for continuous and instantaneous transfer of funds. On the other hand, NEFT, which stands for National Electronic Funds Transfer, settles funds in batches every half-hour.
Is NEFT available 24 * 7?
NEFT is accessible to users all year round, 24 hours a day and 7 days a week. This means that users can use NEFT services on any day of the year, regardless of whether it is a holiday or not.
What if NEFT is done after 7PM?
Users are allowed to conduct NEFT transactions after 7 pm, but the settlement of batches occurs every 30 minutes. The transfer of funds is cleared and completed within a window of one to twenty-four hours.
Is NEFT possible on Sunday?
NEFT transactions can be carried out on Sundays as long as it is not a national holiday and the Reserve Bank of India has designated the day as an NEFT holiday.
What are the primary benefits of using the National Electronic Funds Transfer (NEFT) system?
NEFT offers a number of benefits to users, including: NEFT transactions can be initiated from anywhere, at any time, through a variety of channels, including internet banking, mobile banking, and ATMs NEFT transactions are processed and settled in batches on a half-hourly basis, so funds are typically transferred to the beneficiary account within a few hours NEFT transactions are highly secure, as they are processed through the RBI's centralised payment system NEFT transactions are relatively affordable, with most banks charging a nominal fee for the service.
How does NEFT transfer compare to Immediate Payment Service (IMPS), and what are its unique benefits?
NEFT and IMPS are both electronic fund transfer (EFT) systems operated by the RBI. However, there are some key differences between the two systems: Transaction limit: NEFT has a higher transaction limit than IMPS. The maximum amount that can be transferred through NEFT is ₹2 lakh per transaction, while the maximum amount that can be transferred through IMPS is ₹2 lakh per day Settlement time: NEFT transactions are settled in batches on a half-hourly basis, while IMPS transactions are settled on a real-time basis Fees: NEFT transactions typically cost less than IMPS transactions. NEFT's unique benefits over IMPS include: Higher transaction limit: NEFT is a better option for transferring large amounts of money Lower fees: NEFT transactions are typically more affordable than IMPS transactions Wider reach: NEFT is available at all NEFT-enabled bank branches in India, while IMPS is not available at all bank branches.
Is there a daily limit for NEFT transactions, and if so, how much is allowed per day?
The daily limit for NEFT transactions is ₹10 lakh per customer.
Could you highlight some key features and characteristics of the NEFT transfer system?
Here are some key features and characteristics of the NEFT system: NEFT is a centralised payment system NEFT is a batch processing system NEFT is a credit-push system NEFT is available 24/7
Are there specific rules and regulations governing NEFT transactions that users should be aware of?
Both the sender and receiver must have Indian bank accounts The sender should have enough money to cover the transfer and fees The sender must provide accurate beneficiary details: name, account number, and IFSC code The sender initiates the transaction from their own bank account
What is the scope or reach of NEFT, and can it be used for both domestic and international transfers?
NEFT is a domestic funds transfer system, meaning that it can only be used to transfer funds between bank accounts in India. It cannot be used for international fund transfers.
Is NEFT considered a safe mode of fund transfer, and are there any security measures in place to protect users?
Yes, NEFT is widely regarded as a secure method for transferring funds, thanks to the robust security measures instituted by the RBI. These safeguards encompass encryption, which shields all NEFT transfer against unauthorized access, authentication requirements mandating that senders verify their identity with their bank before transaction processing, and a comprehensive auditing process overseen by the RBI to ensure the integrity and compliance of all NEFT transactions.
