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Difference between NEFT and RTGS

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The acronym 'RTGS' stands for Real Time Gross Settlement. As the name indicates settlement is done on continuous (real-time) without netting. 'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis).

National Electronic Funds Transfer (NEFT) is transfer of funds online by a financial institution, mainly for the banks in India. Individuals, firms or corporates maintaining accounts with a bank branch can receive funds through the NEFT system.


1. The basic difference between them are settlement timings. RTGS is based on the gross settlement where the transaction is settled on an instruction by instruction basis. NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches.


2. As per the Reserve Bank of India for RTGS the minimum amount should be above Rs 2 lakh and NEFT has no limit either minimum or maximum – on the amount of funds that could be transferred using NEFT.


3. RTGS is done on continuous basis whereas NEFT operates in hourly batches - there are eleven settlements from 9 am to 7 pm on week days (Monday through Friday) and five settlements from 9 am to 1 pm on Saturdays.

Charges applicable for the transaction

NEFT

For transactions up to Rs 1 lakh – not exceeding Rs 5 (+ Service Tax)
For transactions above Rs 1 lakh and up to Rs 2 lakhs – not exceeding Rs 15 (+ Service Tax)
For transactions above Rs 2 lakhs – not exceeding Rs 25 (+ Service Tax)

RTGS

For transactions between Rs 2 lakh to Rs 5 lakh - not exceeding Rs. 30 per transaction.
For transactions above Rs 5 lakh - not exceeding Rs. 55 per transaction.
 

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