What Are NEFT, RTGS and IMPS?
They are three ways to send money from one bank account to another in India using account number and IFSC code. All three work 24×7, every day of the year. The difference is how the money moves: in batches, one by one, or instantly, and who runs the system: the RBI for NEFT and RTGS, and NPCI for IMPS.
How Each One Moves Your Money
- NEFT (National Electronic Funds Transfer): your bank sends the payment to the RBI’s NEFT system, which processes payments in half-hourly batches. Banks settle the net amounts they owe each other in each batch. Money usually arrives within an hour or so.
- RTGS (Real Time Gross Settlement): each payment is settled on its own (“gross”), immediately (“real time”), in the banks’ accounts at the RBI. It is meant for large amounts: the minimum is ₹2 lakh.
- IMPS (Immediate Payment Service): run by NPCI, the same organisation behind UPI. The payee’s bank credits the money within seconds, and the banks settle with each other later in cycles.
NEFT vs RTGS vs IMPS: The Difference
| NEFT | RTGS | IMPS | |
|---|---|---|---|
| Run by | RBI | RBI | NPCI |
| Speed | Half-hourly batches | Immediate | Immediate |
| Minimum | No minimum | ₹2 lakh | ₹1 |
| Maximum | No RBI limit (your bank may set one) | No RBI limit (your bank may set one) | Usually ₹5 lakh per transaction |
| Charges online (savings accounts) | Free | Free | Depends on your bank |
| Timing | 24×7 | 24×7 | 24×7 |
Limits and charges are as at the time of writing, and individual banks can set lower limits for their customers.
Which One Should You Use?
- Small, urgent payment: IMPS, or UPI, which runs on similar NPCI infrastructure and is usually simpler.
- Large payment, like a property deposit: RTGS. It is designed for big amounts and settles each payment on its own.
- Not urgent, any amount: NEFT. Free online, and it reaches the other account within the next batch or so.
How Is This Different From UPI?
UPI uses an ID like name@bank or a QR code instead of an account number and IFSC, and adds a PIN on your phone.
Behind the scenes it is closely related to IMPS: both are NPCI systems that credit the payee in seconds. How UPI works step
by step is in What Happens in the 2 Seconds After You Scan a UPI QR?
What If the Money Doesn’t Arrive?
Check the account number and IFSC first: a payment to a valid but wrong account is very hard to reverse. If the money left your account but didn’t arrive, your bank can trace it with the transaction reference (UTR number) on your receipt. If the payee’s bank can’t credit it, the money comes back to you.
Sending money to another country works differently: see How International Money Transfers Work. And for cheques, How Cheques Clear.
For Engineers: Net vs Gross Settlement
NEFT and RTGS are the textbook pair. Net settlement (NEFT) adds up everything each bank owes each other bank in a batch and moves only the differences: far fewer transfers, but money waits for the batch. Gross settlement (RTGS) moves every payment in full, immediately: no waiting and no exposure between banks, but each bank needs enough money in its account for every payment as it happens.
This article explains how the systems work. It is not financial advice, and limits and rules change: check the current ones with RBI or your bank.