All about National Electronic Fund Transfer (NEFT) in India

NEFT, or National Electronic Fund Transfer, is a nationally centralized electronic payment system run by the Reserve Bank of India & is still used by more than 65% of businessmen.

By Amanda Siemson Jun 3 2021 9:05PM 3229 Read
Why is NEFT Still Indian Startup’s Favorite Payment Portal?

NEFT, or National Electronic Fund Transfer, is a nationally centralized electronic payment system run by the Reserve Bank of India that allows funds to be transferred from one bank account to another from any place. It is a digital method of transferring funds from any bank branch to any enterprise, individual, or corporation. It is now the most often utilized method of transferring funds between two bank accounts.

National Electronic Fund Transfer: Advantages

  • The NEFT mechanism eliminates the need to visit a bank to authorize demand drafts and cheques. It saves time and works while making the entire process more efficient.
  • The benefit of NEFT is that it allows funds to be transferred from one bank account to another.
  • There is no need to present physical documentation when sending money using NEFT.
  • The electronic money transfer process is inexpensive and takes just a few minutes to complete.
  • It also allows for one-way transfers of monies from India to Nepal.
  • There is no defined amount transfer limit. However, the maximum amount per transaction in India for cash-based remittances is INR 50,000.
  • Beneficiary account credit is confirmed through SMS or email.
  • It may be used to pay credit card bills, loan EMIs, and foreign exchange remittances.
  • Throughout the year, the system is available 24 hours a day, seven days a week.
  • Transactions are completed in real-time, ensuring the security of both parties.

NEFT Fund Transfer: Step by Step Process

Transacting via National Electronic Fund Transfer is a simple and rapid operation. You must carefully follow the directions provided:

  • Step 1: The first and most crucial step is to access your net banking account. If you don’t already have an account, go to the bank’s website and sign up.
  • Step 2: After logging in, Go to the Add Payee area and enter your beneficiaries’ information, including their name, account type, account number, and IFSC code.
  • Step 3: Next, select NEFT as the mechanism of fund transmission. Now, choose the account to which you want to send funds and enter the amount you wish to transfer.
  • Step 4: Finally, press the submit button. Your purchase has been completed.
Fun Fact: 64% of Indian Businessmen still prefer NEFT Transfer over any other payment source.

NEFT Transaction Charges or Fees

Banks state that there are no fees for NEFT transactions. Fund transfers made online through internet banking utilizing NEFT are free of charge. There are no fees for inward transactions at the destination bank when credit is sent to the recipient/beneficiary account. However, for external transactions, the bank may charge consumers for NEFT transactions such as:

  • Rs.2.50 (+ applicable GST) for transactions of Rs.10000 or more.
  • Rs. 5.00 (+ applicable GST) for transactions ranging from Rs. 10,000 to Rs. 1 lakh.
  • Rs. 15.00 (+ applicable GST) for transactions between Rs. 1 lakh and Rs. 2 lakh.
  • Rs. 25.00 (+ applicable GST) for transactions of Rs. 2 lakhs or higher.
Note: Rates for NEFT transfers from India to Nepal are disclosed on the RBI website under the Indo-Nepal Remittance Scheme.

NEFT: Transfer Amount Limit

There is no limit to the amount of money that may be transferred using National Electronic Fund Transfer. You may start with as little as Rs. 1 and work your way up to any amount you choose to send. However, there is a 50,000 limit using cash method for a one-time financial transfer.

The Reserve Bank of India (RBI) places no restrictions on financial transfers using the National Electronic Fund Transfer system. Individual banks, on the other hand, can set their own boundaries depending on their own laws and regulations. If the funds are transferred within a similar bank account, the transaction is completed in a fraction of the time. However, if the transaction involves two distinct bank accounts, it may take some time.

Note: While UPI Transfer has a transfer limit, NEFT has no limit and thus, is businessmen’s favorite.

NEFT Transactions: Who Can Do It?

Any bank branch that is part of the RBI’s NEFT program is eligible for financial transfers using NEFT. With a bank account, any corporate office, business, person, or organization can use the NEFT transaction method for bulk payments and bill payment.

NEFT Timing: 24/7

NEFT Timing Transactions are accessible 24 hours a day & seven days a week, including holidays. At the moment, this system runs in batches every half hour throughout the day. Monday through Friday (between 8 a.m. and 7 p.m.) and Saturdays (between 8 a.m. and 7 p.m.), there are 12 settlements between 8 a.m. & 1 p.m.

After regular banking hours, the transaction is wholly automated and handled by a bank’s Straight through Processing (STP) system.

Amanda Siemson
Amanda Siemson View More Posts

I am a literary journalist whose stories on human behavior and public policy have appeared in Slate. I am writing a book about family issues and is about to get published next year. Apart from this, I like skiing, and other snow adventure activities. I live with my kids in LA, US.

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