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Difference Between RTGS and NEFT

business-1RTGS vs NEFT

Background
NEFT refers to National Electronic Funds Transfer. It is an online system for transferring funds from one financial institution to another within India (usually banks). The system was launched in November 2005, and was set to inherit every bank that was assigned to the SEFT clearing system. It was made mandatory by the RBI for all banks on the SEFT system to migrate to NEFT by mid December 2005. As such, SEFT was discontinued as of January 2006. The RBI welcomed banks that were full members of the RTGS to join the NEFT system.

RTGS is an acronym that stands for Real Time Gross Settlement. RTGS is a funds transfer system where money is moved from one bank to another in ‘real-time’, and on gross basis. When using the banking method, RTGS is the fastest possible way to transfer money. ‘Real-time’ means that the payment transaction isn’t subject to any waiting period. The transaction will be completed as soon as the processing is done, and gross settlement means that the money transfer is completed on a one to one basis without clustering with another transaction. The transaction is treated as final and irrevocable as the money transfer occurs in the books of the RBI (Reserve Bank of India). This system is maintained by the RBI, and is available during working days for a given number of hours. Banks using RTGS need to have Core banking to be able to initiate RTGS transactions.

Differences
The fundamental difference between RTGS and NEFT, is that while RTGS is based on gross settlement, NEFT is based on net-settlement. Gross settlement is where a transaction is completed on a one-to-one basis without bunching with other transactions. As for a Deferred Net Basis (DNS), or net-settlement, this is where transactions are completed in batches at specific times. Here, all transfers will be held up until a specific time. RTGS transactions are processed throughout the working hours of the system.

RTGS transactions involve large amounts of cash, basically only funds above Rs 100,000 may be transferred using this system. For NEFT, any amount below Rs 100,000 may be transferred, and this system is generally for smaller value transactions involving smaller amounts of money.

RTGS processes in real-time (‘push’ transfer), while NEFT processes in cycles during the given working day. This causes a NEFT transaction that is initiated later than the last cycle to be completed the next day.

Summary:

RTGS is Real Time Gross Settlement, while NEFT is National Electronic Funds Transfer.
RTGS completes transactions in real-time, and is therefore faster than NEFT, which completes transactions in cycles.
RTGS is gross settlement, where a transfer is completed on a one-to-one basis, while NEFT is on a Deferred Net Basis, where transfers are bundled and deferred for a specific time.
RTGS is a high value transfer system, handling funds worth Rs 100,000 and above, while NEFT transfers smaller amounts below Rs 100,000.


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79 Comments

  1. This is really nice posting clearly depicting the main differences between NEFT and RTGS. Thank you for sharing such a nice posting.

  2. Its a really nice and useful definition. Thanks….

  3. 100 % true work. i feel obliged to thank u. A honest and complete knowledgeful help you are providing. thanks a lot

  4. great! 100 % true work. i feel obliged to thank u. A honest and complete knowledgeful help you are providing. thanks a lot.

  5. This is an awesome explaination of the difference between. quite useful for the newer one

  6. Simple to understand

  7. Nice post… This is wat i’m looking for. Thank you guys…

  8. Hi,

    I find very few posts unlike it on any other sites.

    It is very to the point, point Specific and summarized in a expert way..

    I give you 5/5 on it.

    Thank you.

  9. Very clear definition/descriptions provided in simple terms..

    Easily understandable to any person.

  10. thank you for giving diffrence.,i understood easily

  11. very well explained , keep it up.

  12. Hi ,

    Nice definations , it is easliy understood to all .

    your’s,
    chandru

  13. Nice and clear explanation. Thanks !!
    Is there a possibility that a branch is listed with RTGS facility only but not NEFT ?

  14. RTGS is well defined but NEFT is not so, moreever technical aspect for both are missing ,means how its’ works actually, what is the interface. A bank has to do what for availing these facility ? can some one elaborate, Please send the details on my mail ID.

    Thanks.

    Ajit prasad

  15. Good defination. Please do post such informatives.

  16. What is the minimum limit of transfer money in RTGS in present day ?

  17. Thanks for your information!!!!!

  18. Doubt cleared, thanks a ton. Nice explanation!

  19. thanks 4 clearing ma doubts……

  20. Is the limit of Rs.100000 mandatory for RTGS & NEFT? (FAQ does not clarify this). In other words, can I not transfer lower amount say Rs.90000 by RTGS because of urgency? or say 125000 by NEFT?

  21. very nice n simple explanation. please if you have vocabulary of banks terms and commerce terms do tell me.

  22. very well explained
    really appreciable work..

  23. thanks sir……..!!!!!!!!!!!!!!!!!!!!!!!!!

    Its really nice and helpful posting for understanding the transactions….

  24. thanks a lot. it was really-really helpful post.but is it possible to make very tiny transection through RGTS as 99rs or 9rs.
    as we can do transaction of even 59rs in neft.

  25. Easily understood by the common man. Thanks

  26. Good one !!!!!!!!!!!!!
    Quite informative. Keep it up.

  27. what is the maximum limit of RTGS.

  28. THis is very usefull

  29. Hi,

    It is an accurate and perfect difference explained..
    I got the clear picture of NEFT/RTGS.

    Thank you for the one who has explained so neatly.

  30. Thanks for the information. Very simple language specially Summary.

    Regards,
    Tapan

  31. Hello Everyone,

    The difference b/w RTGS & NEFT is described well.
    NEFT has no minimum limit to transfer money whereas RTGS has a minimum limit to transfer money i.e 2 lakh.
    In addition to this, there is no upper limit for
    NEFT & RTGS transactions, but with the following RBI guideline.

    (Limit) (Max RTGS & NEFT limit in Rs)

    Per Transaction………………………………####4,00,000

    Daily……………………………………………..#### 4,00,000

    Weekly………………………………………….#### 16,00,000

    Monthly………………………………………..#### 40,00,000

    Yarly……………………………………………#### 2,40,00,000

    Regards
    Brijesh

  32. it is neessary to every one

  33. Who setteles the complaints of RTGS? RBI.. Recently I have experience of doing RTGS via SBT bank to ICICI. The transaction has not happned for more than 48 hrs. Whom do I complain?

  34. as we know the RTGS comes for the transfer more than 2 lakh, so Is there any charges if we do transfer through RTGS for less than 2 Laks ?.

  35. very useful information. thanks. what about transfer of amount from one branch to the other of the same bank ?

  36. this is really a good information…….thank you very much……

  37. Thanks for such a use full information….

  38. It is an accurate and perfect difference explained..
    I got the clear picture of NEFT/RTGS.

    Thank you for the one who has explained so neatly… 🙂

  39. Good info……..

  40. Dear All, I need to exact clarification about NEFT / RTGS.
    1.)NEFT – Minimum and Maximum Limit Per Day.
    2.)RTGS – Minimum and Maximum Limit Per Day.

  41. Perfect….!!
    Got a clear Idea of NEFT/RTGS..

    Thanks a lot…:-)

  42. Thanks a lot………..!
    Now i have an idia about NEFT and RTGS fund transfer ….!

  43. THANKS BITS
    BASIC INFO IS GOOD

  44. Hats off…

    Its spick & span and understandable at one go

  45. thanks lot for your valuable answer

  46. Thans a lot … 🙂

  47. we ll explained

  48. What is the maximum amount to be done through NEFT and what will be the BANK charges for NEFT & RGTS.

  49. what is the maximum limit for RTGS(minimum RS.200,000 max ?

  50. Well explained. Thanks a lot.

  51. Thanx, i got my reply.

  52. The concept is clear now. Thanks

  53. can anybody explaing me CMS Process of Banking and CMS type if any

  54. What is the maximum amount to be done through RTGS & what will be the minimum BANK charges for RGTS.
    all bank have same charges or may be differ?

  55. thnx everybody, 2day i learned abt rtgs/neft

  56. Just a simple question, does it means that if we do a transfer of amount above 2lacs it will be transferred in Real-time.. since as per above difference transaction above 2lacs is considered as RTGS.

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