NEFT vs. RTGS: Differentiating Between Payment Systems

Understanding the difference between NEFT and RTGS can be quite complex for individuals unfamiliar with the world of digital transfers. However, these systems are vital for quickly and safely transferring funds from one bank to another. This article is here to simplify these payment systems and show you the difference between NEFT and RTGS.

Introduction to Payment System

As we bent towards a digital era, India’s banking industry has progressively embraced technology, boosting efficiency and security. Among the wide array of digital transfer methods offered by Indian banks, two stand out- the National Electronic Funds Transfer (NEFT) and the Real-Time Gross Settlement (RTGS). But what difference between NEFT and RTGS?

NEFT: An Overview

Launched by the Reserve Bank of India (RBI) in 2005, NEFT operates in half-hourly batches. Fund transfers via this method are executed in half-hour slots around the clock, working 24×7 throughout the year, including holidays. This can be used for transferring funds up to Rs.10 Lakh.

RTGS: An Overview

Established in 2004, RTGS operates on a transaction-by-transaction basis, i.e., in real time. This means that through RTGS, the transfer of funds is immediate and continuous throughout the RBI’s working hours. Notably, RTGS is primarily meant for substantial transactions with the minimum transfer amount being Rs.2 Lakh.

Understanding the Difference Between NEFT and RTGS

While both NEFT and RTGS serve a similar purpose, their operational mechanisms differ from one another. Understanding these differences can help you make a more informed decision when choosing the right payment platform.

Operational Hours: The most primary difference between NEFT and RTGS lies in their operational hours. While NEFT operates 24×7, 365 days a year, RTGS works only during bank working hours. This difference makes NEFT a more flexible option.

Speed of Transfer: Since RTGS transfers are on a transaction-by-transaction basis, they are much quicker than NEFT, which works on a ‘batch by batch’ mechanism. Thus, if you are looking for a quicker transfer, RTGS will be your best option.

The Minimum and Maximum Limit: RTGS is designed for high-value transactions, with the minimum limit being Rs.2 Lakh. On the other hand, there is no minimum amount for NEFT, but the maximum limit is Rs.10 Lakh. Therefore, if your transaction falls within NEFT’s limit, it might save you on transaction charges.

Charges: Transaction charges vary between NEFT and RTGS. Naturally, since RTGS is used for high-value transfers, it bears a higher transaction fee compared to NEFT.

Settlements: RTGS follows the system of a real-time gross settlement, meaning the transactions are processed individually in real-time. On the contrary, NEFT follows the system of net settlements, which means that transactions are processed in batches.

Risk Factor: As with any digital systems, both NEFT and RTGS carry their risks. However, compared to traditional methods, they are safer as they are monitored by the RBI. The Bajaj Finserv App further mitigates these risks by incorporating advanced security measures and real-time monitoring, ensuring that all NEFT and RTGS transactions are conducted safely and securely. With the Bajaj Finserv App, users can have peace of mind knowing that their transactions are protected by cutting-edge technology and stringent regulatory oversight.


In the ever-evolving world of digital finance, both the NEFT and RTGS systems play vital roles in making monetary transfers swift, flexible, and secure. Both systems have their strengths and weaknesses, which essentially means that the choice between the two depends on the specifics of the transaction you wish to make.

So, the next time you’re making a funds transfer, consider the variables the urgency of the transaction, the amount to be transferred, the working hours, and charges to make an informed decision and choose the most suitable method. Now that you know the difference between NEFT and RTGS, making the right choice will surely be just a bit easier.

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