Banking GK-What is Difference bitween RTGS and NEFT?

RTGS ( Real time gross settlement )

This is a fund transfer mechanism where transfer of money takes place from one bank to another bank in real time.

RBI has decided the minimum cap of 2 Lac rupees for RTGS transactions.
 In RTGS there is no waiting period, transaction is settled as soon as it’s processed.
 As name includes the gross settlement, It means the transaction is settled by one to one basis without combining with any other transaction.
 RTGS fees regulated by the respective banks but RBI has fixed the upper limit cap for the fees for removing the bank monopoly.
 For any RTGS transaction both sender and receiver banks should have Core Banking enabled.
 RTGS facility can be availed between 9 am to 4.30 pm in week-days and 9 am to 1.30 pm on saturdays.
 As we know that Core Banking enabled banks and branches are assigned an IFSC code.

NEFT ( National electronic fund transfer )

It stands for National Electronic Fund Transfer System introduced by Reserve Bank of India.
 NEFT is a national electronic fund transfer system that can be used for the any electronic fund transfers.
 It is a nation wide funds transfer system to facilitate transfer of funds from any bank branch to any other bank branch. This fund transfer takes place among the member banks and financial institutions throughout India. Most of the banks are members of NEFT.

Main advantages of NEFT:
 Transfers funds from one account to other bank accounts across India.
 DDs/ cheques are not needed in case of Net Banking.
 It is faster, safer, efficient, economical, easier and reliable system.
 Can get confirmation of fund transfer through e-mail or SMS.

You should have account in a bank to avail this facility. Or if you do not have account in a bank still you can avail this facility for cash transaction up to Rs. 50,000/-. But, beneficiary must have an account at the destination bank branch, as basically NEFT is an account to account funds transfer system.

Following items will be required to Transfer funds Through NEFT:
 Beneficiary’s Name
 Beneficiary branch and bank name
 Beneficiary’s Account type and Account no.
 Beneficiary’s Branch IFSC.

Here, beneficiary means a person to whom the payment is directed.

Two ways to do NEFT:
 Fill the application form along with details of cheques/Debit instruction, name and account number to whom the money is to be transferred, IFSC code of bank/branch where funds are to be remitted.

Through Net banking facility, you can transfer funds to other bank accounts across India. You have to register to avail this facility. Some banks allow this even without registration.

In NEFT, settlement takes place at a particular point of time.

For example:

It takes place 6 times a day during the week days (9.00 hours , 11.00 hours, 12.00 hours, 13.00 hours, 15.00 hours and 17.00 hours) And 3 times during Saturdays (9.00 hours, 11.00 hours and 12.00 hours).

Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time, i.e., if the transaction initiated later during the day, money would be transferred next day.