What Is NEFT? Timings, Charges and How It Compares With IMPS, RTGS and UPI

A contractor sends you his account number and IFSC code on WhatsApp and wants ₹4.5 lakh for the work. UPI will not take that in one go, and you would like it to arrive today. Which route do you use? The short answer: for most people paying online, NEFT, RTGS and IMPS cost nothing or close to it, and the real choice comes down to the amount and how fast the other person needs the money.

How NEFT works

NEFT, National Electronic Funds Transfer, is run by the Reserve Bank of India. It does not settle each payment on its own. Payments are collected and settled in half-hourly batches, and since December 2019 those batches run 24 hours a day, every day of the year, including Sundays and bank holidays.

In practice the money usually shows up within a couple of hours at most. The RBI says the beneficiary bank must credit the account within two hours of the batch settling. If it cannot credit the money, it has to send it back within two hours, and a delayed credit makes the bank liable to pay interest to you at the repo rate plus 2 percent.

There is one mechanical detail that catches people out. The credit is released on the account number alone. The name you typed does not have to match. So a single wrong digit in an account number can send your money to a stranger, and the system will not stop it.

NEFT, RTGS, IMPS and UPI side by side

These four exist because they were built for different jobs. Figures below are the RBI’s and NPCI’s published rules; your bank’s own limits and fees can differ, so check them in your net banking.

	NEFT	RTGS	IMPS	UPI
Run by	RBI	RBI	NPCI	NPCI
Timings	24×7	24×7	24×7	24×7
How it settles	Half-hourly batches	One payment at a time, in real time	Instant	Instant
Minimum	None	₹2 lakh	None	None
Maximum	No RBI cap; banks may set their own	No cap	Up to ₹5 lakh per NPCI (check your bank)	₹1 lakh a day person to person; up to ₹5 lakh per payment in some merchant categories
Online charge to you	Nil from a savings account, by RBI direction	Bank decides; RBI cap for branch transfers is ₹25 (₹2 to 5 lakh) and ₹50 (above ₹5 lakh), plus GST	Bank decides; often free in the app	Free for person-to-person payments
You need	Account number and IFSC	Account number and IFSC	Account number and IFSC, or mobile number	UPI ID, QR or mobile number

For a transfer made at a bank branch, the RBI caps NEFT charges at ₹2.50 for amounts up to ₹10,000, rising by slab to ₹25 above ₹2 lakh, plus GST. Inward NEFT, meaning receiving money, is free.

Sending one, step by step

Log in to net banking or the bank’s app and open fund transfer. Add the payee with the account number, IFSC and a nickname, and enter the account number twice if the bank asks. Wait for the beneficiary to be activated, which can be instant or can take a few hours depending on the bank. Pick NEFT, enter the amount and the remarks, then authorise with the OTP. Save the UTR number on the confirmation, because that is the reference your bank and the receiving bank will both ask for if anything goes missing.

If the payee is a business, ask for the IFSC from a cancelled cheque or the bank’s own letter rather than a typed message. IFSC codes are easy to mistype, and the branch code at the end changes between branches of the same bank.

Which one should you pick

Take the contractor’s ₹4.5 lakh. UPI is out unless you split it across days, which invites trouble. NEFT is free online and will arrive inside a couple of hours, which is fine if he is not standing at your door. If he needs it immediately, IMPS handles up to ₹5 lakh and arrives in seconds, subject to your bank’s limit. RTGS also works since the amount is above ₹2 lakh. I would use RTGS for anything over ₹5 lakh and NEFT when time does not matter.

For everyday sums, UPI is simpler. For a few thousand rupees to a family member, NEFT works but is slower than it needs to be. Our explainers on UPI and IMPS cover those two in detail.

Salaries and vendor payments run on NEFT for a practical reason. A company paying 500 people wants one batch file, a clear reference per payee and low cost, and NEFT does all three.

Where it goes wrong

Wrong account number. Read the beneficiary name your bank shows after you add the payee, and compare it with the person you mean to pay. If you have already sent it, call your bank at once with the transaction reference. They can ask the other bank to hold or return the money, but they cannot force it.

Fake invoices. A supplier’s email arrives with new bank details, which are a scammer’s. Before you pay a changed account, phone the supplier on a number you already had, not the one in the email.

New payee limits. Many banks cap what you can send to a freshly added beneficiary for the first day, so adding the payee a day early is a small habit that saves a lot of stress when the payment is due. The exact rule varies by bank.

Cut-off confusion. NEFT is 24×7 now, but your bank may still show older timings on some screens or in a branch. If a payment sent at 2 a.m. shows pending, give it the two-hour window before worrying.

FAQ

Is NEFT available on Sundays and holidays? Yes. NEFT has run 24×7 on all days of the year since December 2019.

How long does a NEFT transfer take? Payments settle in half-hourly batches, and the receiving bank must credit within two hours of settlement. Most arrive well within that.

Is there a charge for NEFT? Not for online transfers from a savings account, which the RBI has barred banks from charging. Branch transfers can be charged up to ₹2.50 to ₹25 depending on the amount, plus GST. Check your bank’s schedule for non-savings accounts.

What is the difference between NEFT and RTGS? RTGS settles each payment individually and instantly but accepts only ₹2 lakh and above. NEFT settles in batches and takes any amount.

Sources checked: the RBI’s FAQs on NEFT and on RTGS, and NPCI’s published IMPS and UPI limits. IMPS limits and charges vary by bank, so confirm yours.

This article is for general education and is not personal financial advice.