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IMPS vs NEFT vs RTGS – Know the right payment method for you

If you’ve ever logged into your netbanking portal for transferring funds from your account, chances are that you’ve encountered three different fund transfer options – NEFT, IMPS, and RTGS. Ever wondered what the difference between NEFT and RTGS and IMPS are? If you have, then this article can help clear them out for you. 

Photo by Mikhail Nilov from Pexels

Photo by Mikhail Nilov from Pexels

Various Payment Methods 

Before we take a look at the difference between NEFT and RTGS and IMPS, let’s first quickly take an individual look at what these three payment options are. 

IMPS 

IMPS stands for Immediate Payment Service. It is an online funds transfer service that’s conceptualized and offered by the National Payments Corporation of India (NPCI). One of the main highlights of this method of funds transfer is that it happens almost instantaneously, hence the name Immediate Payment Service. Also, it is available 24/7, which means that you can make a fund transfer from your account at any time from anywhere you want.   

NEFT 

Now that you know what the IMPS full form is let’s check out NEFT. National Electronic Funds Transfer, also known as NEFT, is an electronic payments system that’s operated by the Reserve Bank of India. Since NEFT is centralized, you can transfer funds to almost any bank account within India. And just like IMPS, the National Electronic Funds Transfer has also been made available 24/7. 

RTGS 

RTGS stands for Real-Time Gross Settlement. It is one of the earliest forms of electronic funds transfer in India and is again operated by the Reserve Bank of India. Since RTGS was designed to facilitate high-value transactions, there’s a minimum funds transfer requirement to be met. RTGS is also available round the clock, and the funds’ transfer gets credited almost immediately.   

Difference between IMPS, NEFT & RTGS

Okay so, now that you’ve been introduced to these three payment methods, it is time we took a look at the various differences. So, let’s begin. 

 

NEFT RTGS  IMPS
Fund transfers through NEFT are processed in batches. Fund transfers through RTGS are processed immediately on a case-by-case basis. Fund transfers through IMPS are processed immediately on a case-by-case basis.
As a result of NEFT transactions being processed in batches, fund transfers may take a few hours to get credited to the target account.  In an RTGS transaction, the target bank account is credited almost immediately.  In an IMPS transaction, the account is credited instantaneously.
For NEFT transactions, the minimum transaction limit is Rs. 1. Since RTGS was designed for high-value transactions, the minimum transaction limit is set at Rs. 2 lakhs.  For IMPS transactions, the minimum transaction limit is also Rs. 1.

 

However these are not the only differences between NEFT and RTGS and IMPS, there are a few more details you need to check before making a transaction with these methods. 

Conclusion

Now that you’re aware of the difference between NEFT and RTGS and IMPS, which one’s the right choice for you? If your transaction value is less than Rs. 2 lakhs and you wish to instantaneously make transfers, then IMPS may just be the right choice for you. However, if your transaction value exceeds Rs. 2 lakhs, but you still wish to make instant transfers, RTGS may be more suited to your needs. And finally, if you’re not concerned about the time taken for fund transfers, then NEFT may just be the perfect choice for you.

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