Bank Exam » Difference Between » NEFT and RTGS


NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement) are two different modes of payment. Know all about it in detail.

With the introduction of technology and new online payment modes , making payment is just a few clicks away from your gadgets. RTGS and NEFT are the two commonly used methods for transferring the funds as per your need. Most of the banks in India provide NEFT services on mobile banking and internet banking. RTGS or Real-time Gross Settlement is another electronic mode of making a payment that is done in real time without any delay. This article deals with the basic differences between NEFT and RTGS. 

What is NEFT?

The full form of NEFT is National Electronic Funds Transfer. The Reserve Bank of India (RBI) introduced this system of fund transfer in 2005. Under the NEFT, customers can electronically transfer funds from one bank to another bank. This is a very convenient way of transferring funds and it is also very fast and efficient.

Advantages and Disadvantages of NEFT

Advantages of NEFT are :

  • Convenient for transferring money from one bank to another bank.
  • Fast and efficient.
  • Safe and secured method of payment.
  • No charges levied by RBI on banks

Disadvantages of NEFT are:

  • Cannot be used for real-time or urgent fund transfers.
  • Requires a minimum amount to be transferred (usually Rs. 5000)

What is RTGS?

The full form of RTGS is Real Time Gross Settlement. It is a system where money transfers take place in real-time, i.e., the money transferred gets credited to the beneficiary account immediately.

Advantages and Disadvantages of RTGS

Advantages of RTGS:

  • Can be used for real-time or urgent fund transfers.
  • No minimum amount is required to be transferred.
  • Now RTGS services are available from Monday to Sunday.
  • Does not require the beneficiary to visit the bank to deposit the money.

Disadvantages of RTGS:

  • Requires a higher transaction fee as compared to NEFT.
  • Does not allow the customers to track the transaction, only payment confirmation is received by the customers.

Do you need a bank account for NEFT and RTGS?

NEFT and RTGS are both electronic payment systems that allow you to transfer money from one bank account to another. However, there are some key differences between the two. For NEFT transactions, you will need to have a bank account with a participating bank. RTGS transactions, on the other hand, can only be made through banks that are members of the RTGS system.

How are NEFT and RTGS different?

NEFT and RTGS can be differentiated on the basis of minimum limit, the maximum limit, settlement time, additional charges, transfer timing, service availability and so on.

  • Minimum limit: The minimum limit for NEFT is Rs. 1000, whereas the same for RTGS is Rs. 200000.
  • Maximum limit: The maximum limit for NEFT is Rs. 200000, whereas the same for RTGS is Rs. 2000000.
  • Settlement time: The settlement time for NEFT is 12 hours, whereas the same for RTGS is almost instantaneous.
  • Additional charges: No additional charges are levied for NEFT, whereas there are charges levied for RTGS. For RTGS, Rs. 30 is charged for every transaction.
  • Transfer timing: The transfer timings for NEFT and RTGS are different – NEFT operates from Monday to Friday and timings are half-hourly slots between 09:00 – 20:00. On Saturday, NEFT operates between 09:00 – 13:30 GMT. RTGS, on the other hand, operates round-the-clock on weekdays.
  • Service availability: NEFT is available on all days except Sundays, whereas RTGS is available 24*seven.
  • Suitable For: NEFT is suitable for small money transactions and RTGS is used for large money transactions.
  • Mode of Payment: NEFT and RTGS are both modes of payment.

In India, the National Electronic Funds Transfer (NEFT) system is used for transferring money electronically between bank accounts while Real-time Gross Settlement (RTGS) is a facility to transfer funds immediately from one bank to another.

So, these are the differences between RTGS and NEFT. Choose the one which suits your needs the best. Both systems have their own advantages and disadvantages, so choose wisely.

How to choose between RTGS and NEFT?

NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement) are two very popular modes of online fund transfer. While both systems have their own advantages and disadvantages, it can sometimes get confusing for a layman to choose between the two. 


To understand in layman’s terms it can be said that both National Electronic Funds Transfer (NEFT) and RTGS (Real Time Gross Settlement) are the safe modes of making a payment.  Both NEFT and RTGS are governed by the guidelines of RBI and hence are equally reliable. The major difference between NEFT and RTGS is that the payment made through RTGS is done in real-time unlike NEFT which follows the specific processing instructions. In this post, we’ve explained the difference between NEFT (National Electronic Funds Transfer) and RTGS (Real-Time Gross Settlement). 


Frequently Asked Questions

Get answers to the most common queries related to the Bank Examination Preparation.

What are NEFT and RTGS?

Answer. National Electronic Funds Transfer (NEFT) is a nationwide system that facilitates the quick and easy transfe...Read full

What is the difference between NEFT and RTGS?

Answer. The key difference between NEFT and RTGS is that while NEFT settles transactions in batches, RTGS settles th...Read full

Which one should I use?

Answer. NEFT is a good option for transferring smaller sums of money, while RTGS is better suited for larger transfe...Read full

How do I register for NEFT/RTGS?

Answer. You can register for NEFT/RTGS by visiting your bank’s website and filling out the necessary paperwork...Read full