NEFT Vs. IMPS: Understand The Key Differences

01^st Feb 2023...

Key Takeaways

NEFT and IMPS are both electronic fund transfer systems that operate 24×7 and are regulated by the Reserve Bank of India.
NEFT transfers funds in hourly batches, while IMPS enables instant transfers, usually within minutes.
NEFT has no upper transfer limit, whereas IMPS transactions typically have a maximum limit of Rs. 20,000.
Online NEFT transactions are free of charge, while IMPS transfers may attract fees ranging from Rs. 2.5 to Rs. 25.
IMPS is better suited for urgent, smaller payments, while NEFT is ideal for higher-value transfers that are not time-sensitive.
Both payment systems require beneficiary details like account number, IFSC code, and name for successful transactions.
NEFT and IMPS offer reliable, secure, and convenient alternatives to traditional payment methods for bank-to-bank transfers.

There are many ways to make bank-to-bank payments, but all of them depend on the time and the amount you want to transfer to another account. Mobile or internet banking, visiting a bank branch, depositing a cheque, there are many ways in which one can make transactions.

Among distinguished modes of payments and the boom of digital money transfer- commonly known as UPI, also got popularity in daily payments and transactions from one bank to another.

However, IMPS and NEFT are some of the most widely known and used transactional methods that the common masses prefer. Both methods are reliable and ensure secure fund transfers across bank accounts. In this guide, let us thoroughly discuss the details about NEFT vs IMPS.

What is an NEFT

NEFT- also known as National Electronic Funds Transfer, is an electronic funds transfer method of the Indian banking system; these services are available 24*7 and are operated by the Reserve Bank of India. However, the payee can send money to another account in batches.

What is an IMPS

Immediate Payment Services, also known as IMPS, is another method of electronic funds transfers from a payee to a receiver account - a nationwide funds transfer system maintained by the National Payments Corporation of India. The service is also available for funds transfer 24*7, like NEFT. However, we must know that these details are subject to changes in guidelines made by the Reserve bank of India.

NEFT vs RTGS vs IMPS

Feature	NEFT	RTGS	IMPS
Processing Time	Works in hourly or half-hourly batches; may take up to a few hours.	Real-time settlement; money is credited almost instantly.	Instant transfer; funds are credited within seconds, available 24×7.
Minimum & Maximum Limit	No minimum amount; maximum depends on the bank’s rules.	Minimum ₹2 lakh; no maximum cap.	No minimum; maximum limit usually ₹5 lakh per transaction (varies by bank).
Availability	Available 24×7, including weekends and bank holidays (online transfers).	Available 24×7, including weekends and bank holidays.	Available 24×7, including weekends and bank holidays.
Charges	Online transfers are usually free. Branch transfers may attract nominal fees based on slabs.	Online transfers are generally free. Branch charges capped at ₹24.50 + GST for ₹2–5 lakh, and ₹49.50 + GST for above ₹5 lakh.	Small charge may apply, usually ₹2.50 to ₹25 depending on amount and bank. Many banks now waive charges for retail users.
Best For	Regular, smaller, and non-urgent payments such as bills or salaries.	High-value, urgent payments, usually for business or corporate needs.	Everyday transfers, small to medium amounts, urgent needs like bill splits or quick remittances.
Settlement Type	Batch-wise settlement, not instant.	Real-time, one-to-one settlement with finality.	Real-time, one-to-one settlement with immediate confirmation.
Security	Secure, RBI-regulated.	Secure, with immediate confirmation of transfer.	Secure, operated by NPCI with instant confirmation.

NEFT Vs IMPS: Understanding the differences

Though both are electronic funds transfer systems and work 24*7, there are some differences that one must keep in mind before initiating the transactions. Both of these methods are safe and involve negligible risk of fraud, both falling under the purview of the Reserve Bank of India. When comparing NEFT vs IMPS, there are some fundamental differences that are as follows:

Transaction charges

The transactions made by NEFT demand no charges for any funds transfer as long as it is done with the help of online services. On the other hand, if the transaction is initiated at the bank branch of the bank, then the charges may apply. In the case of IMPS vs NEFT, the transactions made in IMPS are chargeable, and the per transaction rate differs from bank to bank as decided. However, it mostly ranges from Rs. 2.5 to Rs. 25.

Timings

Rather than a difference, the timings of both transactions have no difference. Both can be used 24*7 and 365 days. It even works on Sundays and holidays. Also, it works on bank holidays and bank offs as well.

Amount limit

However, there is no set lower cap on the transactional amount of both services, IMPS transactions have a maximum limit, but NEFT does not. The maximum limit as per the IMPS transaction has a set cap of Rs. 20,000, but there is no cap for NEFT when we talk about IMPS vs NEFT.

Also Read: IMPS Meaning in Banking: How to Do it, Timing, Charges & Limits

Which one is faster?

As the name suggests, IMPS transfers the funds instantly into a beneficiary's account. It takes a maximum of half an hour for the amount to be credited to the receiver's account. On the other hand, NEFT works on a batch basis. It makes the payment in batches as it is settled on a one-to-one basis transferring money between enabled banks with the help of electronic messages. It is not a real-time money transfer platform like its counterpart, IMPS.

When to use IMPS and NEFT?

Every type of money transfer satisfies some distinct wants and demands of the payee and their recipients. Your needs and the goal of the transfer will ultimately determine which payment method is ideal for you. Let's imagine, for illustration purposes, that you are in charge of paying your parents' rent in a distant city. You want to provide them with monthly payments. NEFT and IMPS are both available. Due to the quick transfer capability, you can now use the IMPS fund transfer technique if your parents require money immediately. You can use the NEFT fund transfer method if they can wait for the transfer of funds, and you do not want to pay the transaction fees associated with IMPS.

For NEFT

If you have any type of savings account like a 0 balance account, you can make NEFT transfers by logging in to the bank’s net-banking portal. Next, you must add an NEFT beneficiary by entering the beneficiary's account number, account type, IFSC code, name, and contact information. Finally, after your bank verifies that the intended beneficiary has been added, you must go to the NEFT Fund Transfer tab. The recipient to whom you want to transfer funds must then be chosen and the beneficiary's account information will appear. The transfer Amount and Remarks (optional) must then be entered. The beneficiary will get your NEFT funds in an hourly batch transfer.

Also Read: NEFT Meaning in Banking: How to Do it, Timing, Charges & Limits

For IMPS

You must first log into your bank's net-banking portal to perform an IMPS transfer. Next, you must add an IMPS beneficiary by providing the beneficiary's account number, account type, IFSC code, name, and contact information. Finally, after your bank verifies that the intended beneficiary has been added, you must select the IMPS Fund Transfer tab. The recipient to whom you want to transfer funds must then be chosen. The beneficiary's account information will show up when you do that. The amount and the remarks must then be entered. Once the payment has been verified, the transaction will be finished. Since this is an IMPS transaction, money will be transmitted right away.

Final Words

NEFT and IMPS are both effective payment methods. When comparing NEFT vs IMPS, IMPS is best suited for instant transfers but has certain restrictions, whereas NEFT allows the transfer of larger amounts. You can use NEFT to send more significant amounts of money. You should also compare the fees you pay for various types of transactions.

When it comes to small transactions, IMPS is by far the most widely used traditional method of payment. However, as an online payment method, nothing tops the UPI money transfers. Unlike IMPS and NEFT, UPI transactions with Paytm have no restrictions and may be carried out whenever and from wherever.

FAQs

1. Is there any limit for NEFT transfer?

The NEFT system itself does not impose a fixed minimum or maximum transfer limit. However, individual banks may set their own per-transaction or daily caps depending on account type and internal risk policies.

2. Can we do NEFT without a bank account?

No. NEFT requires both sender and receiver to have bank accounts. You need the account number and IFSC code of the beneficiary to initiate the transfer.

3. What are the timings of NEFT?

NEFT is available 24×7, all days of the year, including weekends and holidays, for online transactions. At bank branches, NEFT may only be available during working hours.

4. Is there any charges for NEFT?

Online NEFT through internet or mobile banking is usually free. At branches, banks may levy small charges depending on the amount—for example, around ₹2.50 for amounts up to ₹10,000, and higher slabs for larger sums.

5. Can we do NEFT for international transactions?

No. NEFT works only for domestic fund transfers within India. For international transactions, outward remittance or SWIFT facilities are used.

6. What is the limit of NEFT transfer per day?

RBI has not fixed a daily cap. Banks may set their own daily or per-customer limits, often ranging between ₹2 lakh and ₹10 lakh for retail customers.

7. How long does it take for a RTGS transfer to go through?

RTGS is processed in real time. Funds are usually credited to the beneficiary account within minutes.

8. What are the charges for RTGS transactions?

Online RTGS via net banking or mobile banking is generally free. For branch-initiated transactions, banks may charge ₹24.50 for amounts between ₹2 lakh and ₹5 lakh, and ₹49.50 for transactions above ₹5 lakh.

9. Can RTGS be used for international transactions?

No. RTGS is only for domestic transactions within India. International transfers require other systems such as SWIFT.

10. Are there any extra charges for an IMPS transfer?

Some banks levy small charges for IMPS, usually between ₹2.50 and ₹25 per transaction depending on the amount. Many banks, however, have waived these charges for individual customers using mobile or net banking.

11. Is GPay IMPS or NEFT?

Google Pay (GPay) uses UPI as its primary system, not IMPS or NEFT. UPI is built on the IMPS infrastructure but allows instant transfers with just a mobile number or UPI ID.

12. Which mode is faster NEFT or IMPS?

IMPS is faster because it is real-time, and funds are credited instantly. NEFT works in batches, so transfers may take from 30 minutes to a few hours.

13. Is RTGS mode of payment safe?

Yes. RTGS is operated by the Reserve Bank of India and is considered one of the most secure payment systems. Funds are transferred in real time with immediate settlement, leaving very little risk of failure.