National Electronic Funds Transfer (NEFT) is one of the most common electronic fund transfer platform that allows people to transfer money from any bank account to another. This payment system that is accepted nationwide is well known because it allows quick one-to-one funds transfer. Under the NEFT scheme, people may simply electronically transfer money from one bank branch to another person with an account in any other bank branch across the country that is under the NEFT Scheme. Also note the bank does require an IFSC code to complete the transaction. Some banks even offer the NEFT transfer through their ATMs.
An IFSC code is simply a alphanumeric code made up of 11 characters which is unique and assigned to a specific branch for any bank that functions under the NEFT network in India. While we get to understand more details about a NEFT online transfer it is essential to know that transferring money from a bank branch to another through accounts is possible. Please note that the bank branch should be a part of the NEFT network along with RTGS services. It is important to know that an IFSC code can be broken down into 3 specific parts: The first part is the bank name, continued by the number “0” and then the unique branch code assigned by NEFT. It looks like this, ‘XYZ00000123’.
Step By Step NEFT Transfer Procedure
The procedure for National Electronic Funds Transfer (NEFT) is mentioned below:
Online Procedure For NEFT:
To transfer funds via NEFT online follow these procedure
Step 1: First login to your net banking account. If you do not have a net banking account then register for it on the website of your bank.
Step 2: Add the beneficiary as a payee. To do so, you have to enter the following details about the beneficiary in the ‘Add New Payee’ section:
- Account Number.
- IFSC Code.
- Account Type.
Step 3: Once the payee is added, choose NEFT as mode of Fund Transfer.
Step 4: Select the account you wish to transfer money from, select the payee, enter the amount that you wish to transfer and add remarks (optional).
Step 5: Click on submit.
Offline Procedure For NEFT:
Step 1: Go to your bank.
Step 2: Fill the NEFT/RTGS form. Provide the following details about the beneficiary in the form:
- Account Number.
- Bank Name.
- IFSC Code.
- Account Type.
- Account Number.
- Amount to be transferred.
Step 3: Submit the form to authorize your bank to transfer the money.
How to Use NEFT to Transfer Money?
This is a generic process of a NEFT transfer, however minute details may vary, based on the banks sending and receiving the fund transfer:
- You need to first fills up an online application form on the bank website, where you add the details of the person you are sending the money to a.k.a. Beneficiary. This will include details such as name, the name of his or her bank, their branch name, IFSC code of their bank, the type of account and finally the account number along with the amount you wish to send. The remitter authorizes his/her bank branch to debit his account and remit the specified amount to the beneficiary. This facility is also available through online banking and some banks offer the NEFT facility even through the ATMs.
- Your bank will then issue a message and will then send it to their NEFT Service Centre.
- NEFT forwards this message from your bank to the NEFT Clearing Centre which is operated by National Clearing Cell which is a part of the Reserve Bank of India in Mumbai and hence include the transaction in the next available branch of transaction.
- The NEFT Clearing Centre then sorts all the funds transfer transactions based on banks and accounts the entries for fund transfer from your bank which will be debited and gives the funds to the recipient's banks. The NEFT Service Center then receives the messages and entries along with the messages from the NEFT Clearing Centre and passes on the funds to the receiver's account.
What are the Fee & charges for NEFT Transfer
The recipient bank does not charge anything to the recipient account for a NEFT transaction.
For the sender, the sending bank charges the following based on the amount being transferred as follows:
|Transaction Amount||NEFT Charges|
|Amounts upto Rs 10,000||Rs 2.50 + Applicable GST|
|Amounts above Rs 10,000 and upto Rs 1 lakh||Rs 5 + Applicable GST|
|Amounts above Rs 1 lakh and upto Rs 2 lakh||Rs 15 + Applicable GST|
|Amounts above Rs 2 lakh and upto Rs 5 lakh||Rs 25 + Applicable GST|
|Amounts above Rs 5 lakh and upto Rs 10 lakh||Rs 25 + Applicable GST|
Timings for NEFT Transactions:
At the moment NEFT functions in hourly batches hence between the service centers operational hours (8:00 AM to 7:00 PM on any given week day along with 8 am to 1 pm on Saturdays there are 8 and 6 batches that operate, respectively.
Hence money can be transferred from Monday to Saturdays (Except the 2nd and 4th Saturday of the month) from 8:00 AM to 6:30 PM. Also, NEFT transactions do not get credited on public and bank holidays.
But, the sender can queue in the transaction for the recipient and wait, when NEFT picks it up their next working hour and day.
Public Holidays when NEFT Transactions are not completed include Republic Day, Good Friday, Annual Closing of Banks, RBI's Annual Closing of Accounts, Ramzan Id (Id-ul-Fitr)/Ratha Yatra, Independence Day, Dasara / Vijaya Dashami and Muharram.
How NEFT is Different from RTGS?
This was said to be the quickest way to transfer money online until UPI came into the picture. The amount for transfer must be more than Rs. 2 lakhs. This is one of the most safe and secure channels for money transfer in the country. Though it is slightly different from NEFT, this form of transaction also requires knowing the the IFSC code of the sender as well as the recipient. The requests are processed instantly post receipt but only in particular banking hours as mentioned by Samarth Sahakari Bank. There are no maximum amount limits for RTGS service .
News About National Electronic Funds Transfer (NEFT)
No Transaction Fee for NEFT, RTGS in HDFC Bank
All online fund transfers initiated through NEFT and RTGS can be made free of cost in HDFC Bank. This move has been implemented from November 1, 2017.
THe main objective behind this decision is to encourage more and more digital banking transactions in the country.
Before this move was implemented, the charges levied for RTGS transactions were Rs.25 per fund transfer between Rs. 2 to Rs.5 lakh. For NEFT, the charges were Rs. 15 per transfer from Rs. 1 lakh to Rs.2 lakh and Rs.2.5 for fund transfers that range from Rs.10,000 to Rs.1 lakh.
10th November 2017
Digitization: Currency Printing may Reduce
The number of currency notes printed may decline in the next two years due to digitization, according to Union Minister Nitin Gadkari.
The minister said that there has been a rise in the number of cashless transactions in 2017. To put it in numbers, there has been a rise by 58%. In 2016, the total number of NEFT transactions were 120 crore, while in 2017 these numbers inclined to 160 crore. The total number of debit card transactions that were carried out in 2017 amounted to 240 crore. There has also been a rise in the number of credit card and NEFT transactions.
9th November 2017
Debit Card Usage Goes Down; Digital Transactions Up
There has been a rise in the number of digital payments made by bank customers after demonetization and a reduction in the use of debit cards, according to a well reputed investment banking firm.
The National Electronic Fund Transfer (NEFT) system has seen exponential growth and has risen by about 30%. NEFT transaction size has improved by 10%. The overall growth in NEFT transactions is 40%. Apart from this there has also been an increase in RuPay usage. Simultaneously, there has also been a growth in the number of IMPS transactions. Both in terms of volume and value, the number of debit card transactions have gone down. UPI and BHIM app has also seen a growth.
6th October 2017
Surge in Digital Transactions Post Demonetization
There has been a surge in the number of digital transactions in the country and a fall in debit card usage, according to a well known investment banking firm. This trend has been recorded post demonetization.
The number of National Electronic Funds Transfer (NEFT) and Immediate Payment Service (IMPS) transactions have gone up since demonetization. To initiate fund transfers through NEFT and IMPS one has to provide IFSC code, account number and other payee details. Apart from this, RuPay has been seeing a very fast adoption rate.
NEFT transactions have seen a growth of 30% and there has also been an increase in per-transaction size by about 10%. The overall growth in the number of NEFT payments is around 40%.
IMPS transactions have seen a growth rate of 100% plus. IMPS provides the customer the convenience of transacting on a 24/7 basis and 365 days in a year.
UPI and BHIM app transactions have also seen a steady rise.
28th September 2017
88% loan disbursal by MFIs through NEFT/IMPS
It has come to light that more than 60% of Microfinance Institutions (MFI) in India are disbursing loans using various cashless methods. This has been adopted to push up operational efficiency in the system.
In fact, during fiscal 2017, out the 60% of MFIs that disbursed loans through cashless methods, over 88% of MFIs in India disbursed loans through modes such as National Electronic Fund Transfer and Immediate Payment Service (IMPS).
However, in the 4th quarter of 2017, only as much as 39% of loans were disbursed through cashless means. This data was published by the Microfinance Institutions Network (MFIN).
According to the report, going cashless is in an effort to mitigate risk, hike operational efficiency, improve cash management systems, promote safety and productivity.
Infact, demonetization and the various government measures have led to the rise in digital transactions in the country. This has also helped MFIs adopt cashless modes of transactions. People from rural India are also adopting these practises in a steady manner, according to experts.
Some of the popular cashless transaction methods used include mobile wallets, prepaid cards, and Aadhaar-enabled payments, among other modes. The adoption rate has been increasing at a fast pace, according to reports.
1st September 2017
RBI reduces the clearance time for NEFTIn a bid to make the digital transactions more efficient, the Reserve Bank of India has taken the initiative to cut down the time involved in National Electronic Funds Transfer (NEFT) transactions. Currently, NEFT transactions are carried out on an hourly basis, RBI plans to reduce it to half-hourly basis. This initiative will make electronic payments more efficient while offering convenience to the customer. By making NEFT faster, it is expected to see a rise in the number of people using NEFT over other modes of transactions. With NEFT settlement cycle reducing from hourly batches to half-hourly batches, the government is a step closer to making India a cashless economy. The government has also offered various other platforms for carrying out payments and transactions since demonetization of scrapped Rs.1,000 and Rs.500 notes. The digital wallets, UPI apps, Aadhaar-Enabled Payment System, and other initiatives are already in progress to offer superior electronic payment services.
7th April 2017