Two decades ago, the transfer of funds was a tedious process. However, with the technology making rapid headway, the start of an electronic fund transfer system came into the markets. By that, we could effortlessly transfer money or make payment with the tap of our fingers using our mobile phones. Then came different methods to transfer money. The NEFT and IMPS are two such systems that transfer funds electronically. So how are they different? How does the system benefit people? Read on till the end to find the answer to these questions.
What is IMPS?
IMPS abbreviated as Immediate Payment Service allows you to transfer funds between different banks. You can immediately transfer money using your mobile phones with this service. IMPS, established in 2010, became remarkably valuable to people across India, and presently over 200 million transactions take place every month. National Payment Corporation of India handles this system, and there are around 53 commercial banks currently. You can even carry out intra bank transactions with this.
What is NEFT?
NEFT abbreviated as National Electronic Funds Transfer allows one to transfer funds between the banks which is, NEFT enabled. It garnered more people in no time because of the ease of access and convenience in transferring the money. Launched in 2005, RBI handles NEFT. Over ₹1,811,780.90 crore transactions were made through NEFT as of September 2019. With 216 banks that have over 1,48,477 branches, one can effortlessly transfer using NEFT.
Advantages of IMPS
IMPS provides a lot of immeasurable benefits, which is why people use it in large numbers to date. Let’s take a look at some of the primary advantages that it offers to its customers.
- Availability – It is available any time of the day with its 24 hours service and, you can even transfer funds on holidays. It is one of the most reliable systems that offer the convenience to use it anytime.
- Ease-of-use – You can easily access using mobile phones or ATMs or even Internet Banking. This multi-device feature allows you great flexibility anytime and anywhere.
- No minimum limit – You can transfer any amount and, there is no limit on the minimum value of money that you have to transfer.
- Instantaneous – The whole process of transferring takes place within a fraction of seconds. You don’t have to wait for hours for your money to go to another account.
- Versatility – You can make inter as well as intra bank payments using this service. There is no restriction like you should transfer to only those having their account in the same bank.
Advantages of NEFT
NEFT, used by thousands of people all over India, is one of the highly beneficial electronic fund transfer systems. There are many benefits of using NEFT and, they are listed down below,
- Reliable – NEFT is maintained by Reserve Bank of India, so it is highly reliable and, you need not worry about transferring any amount with NEFT.
- Security – There are many preconceptions about its safety since it is an online transfer, but your safety is their priority and, they ensure your privacy is protected.
- Quick service – Their service is very speedy and, the transactions can be in no time.
- Moderate processing fee – They don’t charge you with a large amount for using their service. The processing fee is very minimal, which makes it profitable for you too.
- Simple – Only your IFSC code of the bank branch and the bank details of the beneficiary is sufficient for transferring the funds.
Comparison of IMPS and NEFT
Now that we have seen what these both electronic fund transfer systems do and, how it benefits customers let’s now compare both of these and find out which is better or if both are equally good.
Minimum and maximum limit
IMPS – With this, you can transfer up to 2 lakhs and, the minimum amount that can be transferred is as low as one rupee.
NEFT – Here, there is no restriction on the maximum value that you can transfer. You can transfer up to any value and, the minimum amount that you can transfer is one rupee, which is the same as IMPS.
IMPS- It is restricted to only online payment so, it is good to have an internet connection to make payments, but you cannot transfer using any offline methods.
NEFT- It facilitates both online and offline payment methods and hence offers great flexibility to the users.
Usage of the Service
IMPS – The best part of IMPS is that you can use it anytime to transfer the funds, whether it is during holidays or a Sunday. There is no time and date constraint.
NEFT – Earlier you could transfer only between 8 a.m. to 7 p.m. on working days. However, it is revised and you can transfer funds now 24/7.
IMPS – It offers real time-based settlement and, you could see your money being transferred in no time immediately.
NEFT – The settlement type is done in batches. which is 48 half-hourly batches. So, once you have transferred money, it will take a few hours to reach the beneficiary’s account.
Speed and transaction charges
IMPS – Since it is real-time based, it is pretty fast and, the charges differ on the person’s bank. It will cost around Rs 5 for transactions between 10,000 and one lakh and around 15 for above one lakh transactions.
NEFT – There are no transaction costs involved in this. You can readily transfer without having to pay any fees.
As we have seen, internet banking has been a part of peoples’ lives for a long time now and, day by day, with the evolving technology, there is a substantial amount of changes happening in the banking sector. The payments are being made more accessible than ever and they are reliable as well. Internet banking has taken over the traditional methods in just a decade and, there is a lot more to come possibly in the coming days.