Difference between NEFT and RTGS
NEFT and RTGS Stand for National Electronic Fund and Real-Time Gross Settlement Respectively. Both Help in Interbank Transfer of Amount from One Bank to Other Bank. This is the payment method. It is managed by NPCI. NEFT and RTGS are now 24*7. This means you can do NEFT and RTGS on your own. No need to go to the bank to give a cheque to the banker and asking him whether he has initiated NEFT/RTGS or not. This is really Helpful in Businesses. NEFT and RTGS are Mostly Used by Business owners. Small Amounts up to 2 Lakhs can be transferred via UPI, IMPS but an amount more than that has to be initiated through RTGS.
What is NEFT?
NEFT Stands for National Electronic Fund Transfer. The maximum Amount Transfer Capacity is 2 lakh Rupees. This is mainly used by Business owners who have current Account. Previously Common People also uses this facility. Amount Transferred through NEFT reaches the beneficiary account by the evening. This is very slow and time-consuming. After the launch of IMPS, and other Wallets use of NEFT declines.
What is RTGS?
RTGS Stands for Real-Time Gross Settlement. This is used if you need to transfer an amount of More than 2 lakh Rupees. As Its Name Suggests Real-Time it means the amount gets transferred in Real-Time without any delay. NPCI(National Payment Corporation of India) Manages this. It is also made 24*7 by RBI. You can do RTGS at any time of day on your own.
Let’s Understand this with an example.
Suppose you have an account in XYZ Bank and you need to Transfer the Amount to your Brother’s Account whose account is in ABC Bank. Your Brother needs an Amount Urgently as he has to submit his college Fees. College Fees is 4 Lakh Rupees. IMPS, Google Pay, PhonePe cannot happen. ABC Bank is not having its Branch in your Town. How Will You Transfer this Amount? This is Interbank so you cannot Directly Deposit into his account. How Will you transfer this amount? The simple answer is RTGS(Real Time Gross Settlement)