What is NEFT?

by Jeremy

National Electronic Fund Transfer (NEFT) is an electronic fund transfer system maintained by the Reserve Bank of India (RBI). It was founded and maintained in November 2005 by the Institute for Development and Research in Banking Technology (IDRBT). NEFT allows bank customers in India to transfer funds between any two NEFT-enabled bank accounts on any basis. This is done through electronic messages. Unlike real-time gross settlement (RTGS), fund transfers through the NEFT system do not occur on a real-time basis. NEFT transfers funds in half-hour batches with 23 days, which is between 8:00 am and 6:30 pm on weekdays. There is no settlement on the second and fourth Saturdays of the month, or on Sundays, or on public holidays.

Transaction Limits

  • Minimum amount: Rs 1
  • Maximum amount: no limit

Settlement Mechanism: Batch

Transfer Speed: 2 hours (subject to cut-off timing and batch)

Payment Option: Offline (Bank Branch) and Online (NetBanking)

Service Availability:

Weekdays: 12 batches (8:00 a.m. – 6:30 p.m.)

Saturday: 6 batches (8:00 a.m. – 1:00 p.m.)

Sunday Bank Holiday: unavailable

Transfer Charges:

  • Rs.10,000 तक – Rs.2.50
  • Rs.10,000 to Rs.1 Lakh – Rs.5
  • 1 Lakh to Rs.2 Lakh – Rs. 15
  • Rs.2 Lakh to Rs.5 Lakh – Rs.25
  • Rs.5 Lakh to Rs.10 Lakh – Rs. 50

National Electronic Fund Transfer (NEFT) is a nationwide payment system that allows the transfer of funds from one bank account to another bank account. With the increasing focus on online banking, NEFT has become one of the most popular methods of fund transfer. Since it can transfer money electronically from any bank branch to an individual, it has eliminated the need to visit the bank branch for transfer of funds.

What is NEFT process? (What is NEFT Process?)

If a person wants to transfer money from his bank account to another person’s bank account, then he can say that he can do it through NEFT process and not in lieu of withdrawing money and then it in cash Or will pay by writing a check. The main advantage offered by NEFT is that it can transfer funds from any account of any branch to any other bank account located at any place. The only condition is that both the sender and receiver branches must be NEFT-enabled. You can see the list of NEFT-enabled bank branches on the RBI website or call your bank’s customer service to confirm the same.

How to transfer funds through NEFT (How to Transfer Funds through NEFT)

To transfer funds using NEFT, following procedure needs to be followed-

Step 1- Login to your online banking account using your login ID and password.

Step 2 – Go to NEFT Fund Transfer section.

Step 3 – Add beneficiary by entering your name, bank account number and IFSC code.

Step 4 – After the beneficiary is successfully added, you can initiate the NEFT transfer. Just enter the amount to be sent and send.

NEFT operates on a deferred settlement which means that transactions are done in batches. There are 23 half-hour batches on every working day from 8 am to 7 pm.

Who can conduct NEFT transactions? (Who can make NEFT transaction?)

The Reserve Bank of India provides a list of participating bank branches, which are NEFT-enabled, meaning that one can conduct NEFT transactions through these bank branches. As already stated, any person, firm or corporate, who maintains a bank account with a participating branch, can make a NEFT transfer at any time. However, if a bank does not maintain an account, it can still deposit cash at the NEFT-enabled branch, provided it furnishes its address, email ID, contact number and more information about the bank. The maximum amount of such transfer is Rs. 50,000.

What is NEFT Transfer Limit? (What is NEFT Transfer Limit?)

There is no upper or lower limit on the amount to be transferred through NEFT. There is only one limit on the amount of lump sum transaction through cash mode, which is Rs. 50,000. Depending on each bank, the time and settlement period may be different for each transaction. Typically, if funds are transferred to the same bank account, they can be expected to receive them within a few seconds. However, when such transfers occur between different banks, the settlement time may be longer.

What else can you do with NEFT service? (What else can you do with NEFT service?)

Now that you know what NEFT is, it is worth mentioning that NEFT’s service can be used to pay loan, EMI, credit card dues etc. Therefore, NEFT’s service is not limited to individual fund transfers only.

Benefits of using NEFT

In NEFT process, you have to first enter the beneficiary details for the first time after which you can select the beneficiary from the list, enter the amount and send it. Take a look at some of the benefits of NEFT transactions that can simplify your daily transactions:

  • No physical presence of either party is required to carry out the transaction.
  • There is no need to go to the bank to transfer the amount.
  • NEFT is simple and efficient. This can be done within a minute’s time.
  • Confirmation of a successful transaction can be easily received and viewed through email and SMS notifications.
  • Internet banking can be started and operated from any place. This means that a person does not need to be present at a particular location to conduct NEFT transactions.
Simple summary
  1. National Electronic Fund Transfer (NEFT) is a nationwide payment system that allows the transfer of funds from one bank account to another bank account.
  2. It was founded and maintained in November 2005 by the Institute for Development and Research in Banking Technology (IDRBT).
  3. It can transfer funds from any account of any branch to any other bank account located at any place.
  4. NEFT’s service can also be used to pay loan, EMI, credit card dues etc.
  5. Confirmation of a successful transaction can be easily received and viewed through email and SMS notifications.

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