What is NEFT?

NEFT (National Electronic Funds Transfer) is a nationwide system for sending money from one bank account to another, commonly used for everyday payments.
It works on a deferred net settlement model; transactions are collected in half-hour batches, and banks settle the net amount between them.

It’s best suited for everyday, lower-value transfers like salary credits, routine digital payments, and regular vendor payouts.

NEFT is now running 24×7 with 48 half-hourly settlement cycles throughout the day (a facility introduced in December 2019).

Key features of NEFT

Now let’s break down NEFT and why it’s often the default choice for regular, day-to-day business payments:

• No minimum or maximum transfer amount (you can send as little as ₹1)

• Processed every 30 minutes in fixed settlement cycles (48 a day)

• Available 24×7, 365 days

• Regulated by the RBI and supported by almost every bank in India

• Uses net settlement, so it’s lighter on bank liquidity than RTGS.

• Commonly used for salaries, bills, and everyday SME/vendor payments.

How does NEFT work?

Here’s how an NEFT transfer typically goes through, from start to finish:

• The sender starts the transfer through NetBanking, a mobile app, or at the branch using the beneficiary’s IFSC.

• The sender’s bank sends the request to the RBI’s NEFT network.

• The transaction waits in line until the next 30-minute settlement cycle.

• The RBI works out the net amounts each bank needs to pay or receive.

• Once banks settle those net positions, the beneficiary’s bank credits the account and a UTR is generated for tracking.

What is the difference between RTGS and NEFT?

Even though the RBI runs both NEFT and RTGS and both are reliable bank-to-bank transfer systems they differ on key points like speed, settlement method, transfer limits, and fees:

Speed and settlement mechanism

If speed is your question, then RTGS is the faster option every time, as with RTGS, the transfer is processed right away.
Once you confirm the payment, the RBI route settles it in real time between banks, and the beneficiary is usually credited within seconds. Since each transaction is settled individually, there’s no batch queue to wait for.

With NEFT, payments are processed in 30-minute batches. If you place the transfer just before the next cycle, it can go through quickly. If you miss it, you’ll wait until the following batch, usually just a short delay.

Transaction limits  

RTGS has a minimum transfer size of ₹2 lakh and no upper limit. It’s typically used for large payments like property deals, big corporate payouts, or bank-to-bank transfers and isn’t meant for small, routine transactions.

NEFT isn’t tied to a fixed amount, whether you’re sending ₹1 or a larger sum, it usually works. That’s why it’s a common choice for routine transfers, vendor payouts, and regular business spending.

Charges

Let’s unpack the fees and charges, step by step:

RTGS charges

• Online RTGS: In most cases, RTGS transfers made through netbanking or a bank’s mobile app come with no charge, so you’ll usually pay ₹0.

• Branch RTGS: If you initiate RTGS at a bank branch, charges can apply and the RBI has set caps on what banks can charge:

• ₹2 lakh to ₹5 lakh: up to ₹24.50 + GST

• Above ₹5 lakh: up to ₹49.50 + GST

Banks can set their fees within these RBI caps, so the exact charge may differ a bit for example:

• SBI, for example, is around ₹20 + GST for ₹2–5 lakh, and about ₹45 + GST for transfers above ₹5 lakh.

• HDFC Bank often applies a flat ₹15 + GST, regardless of the amount.

NEFT charges

• Online NEFT: Transfers made via netbanking or mobile apps are usually free.

• Branch NEFT: If you do it at a branch, charges may apply here are the RBI-capped maximum fees:

• Up to ₹10,000: up to ₹2.50 + GST

• ₹10,000 to ₹1 lakh: up to ₹5 + GST

• ₹1 lakh to ₹2 lakh: up to ₹15 + GST

• Above ₹2 lakh: up to ₹25 + GST

For example, Indian Bank typically follows these slabs closely so for a ₹1.5 lakh NEFT done at the branch, you’d pay roughly ₹15 + GST.

Key differences at a glance

If you want a quick comparison, here’s RTGS vs NEFT at a glance:

NEFT vs RTGS: Which one should you choose?

It’s not about which one is “better”, it’s about which one fits the situation you’re dealing with.

Choose RTGS when:

• The amount is ₹2 lakh or more and the recipient needs it immediately for example, clearing a large invoice, paying a security deposit, or making a deadline-based vendor payment.

• Cash-flow certainty is important, RTGS helps. It settles in real time through the RBI, so once it’s processed, the payment is transferred.

• Also, when the other side needs extra confidence, RTGS is often the safer bet. For large amounts, many businesses and financial institutions prefer it because it lowers credit risk and settlement uncertainty.

Go with NEFT when:

• It’s a small-to-mid-value payment, like regular payouts, vendor bills, subscriptions, or reimbursements.

• When saving on fees matters more than speed, NEFT is a solid pick. Online NEFT is usually free for individuals, and many banks offer low-cost options for businesses sending payments in bulk.

• If a short wait is fine, NEFT works well. Since it runs in 30-minute cycles all day (even on weekends and holidays), it’s reliable just not immediate like RTGS.

Use cases across industries

Every industry uses these rails a little differently:

• Big companies usually use both. For large, deadline-driven payments like settling supplier invoices, moving funds between group entities, or paying sizeable tax dues RTGS is typically the go-to.

• For bulk, routine payouts like employee salaries, vendor invoices, or utility payments, NEFT is often the more cost-effective choice and works smoothly and using both lets corporates strike the right balance between speed and cost.

SMEs

Most small and mid-sized businesses use NEFT for day-to-day transfers because it’s straightforward, cost-effective, and reliable for regular payments.
RTGS is usually reserved for larger amounts or situations where the money must clear immediately. In normal operations, NEFT handles most of the volume, while RTGS is used only when urgency or ticket size demands it.

Export-Import businesses

In cross-border business, timing is everything. That’s why RTGS is a common pick for large, time-bound payments especially in forex-linked deals when you need money to clear quickly and with certainty, like releasing shipment payments or meeting strict contract deadlines.

For routine local costs like transport, storage, or smaller vendor payments, NEFT usually does the job.
But when you need the transfer to clear right away and be fully settled, RTGS is the more dependable option.

Retail and individuals

For founders and self-employed professionals, NEFT is a great fit for routine payments, vendor bills, contractor payouts, and subscriptions. It’s easy to use, dependable, and usually free when done online.

RTGS makes more sense for large, time-sensitive payments like receiving or sending a big client transfer, closing a property deal, or making a one-time high-value investment. In those moments, the speed and certainty are worth it, even if there’s a small fee.

How does Infinity simplify RTGS and NEFT transfers for global businesses?

NEFT and RTGS handle transfers within India, but when the money is coming from international clients, the bigger pain often shows up earlier, in the form of extra fees, hidden FX spreads, long settlement times, and compliance paperwork.

That’s where Infinity comes in. It’s for Indian freelancers, agencies, exporters, and founders to collect international payments in a multi-currency account (supports 50+ currencies) and move the money to an Indian bank account in a way that’s simpler and more predictable.

Here’s how it works on the ground:

• Clear pricing: a flat 0.5% all-inclusive fee, so you see the cost upfront.

• No FX surprises: conversions happen at live exchange rates, with no extra markup added on top.

• Quick payouts to India: your funds are typically credited to your Indian bank account within 24 hours, not days.

• Less compliance hassle: after every successful transfer, Infinity automatically generates a FIRA (Foreign Inward Remittance Advice) for your records and bank/tax needs.

While NEFT vs RTGS helps you pick the right rail for domestic transfers, Infinity makes the international side feel just as seamless, with fixed timelines, transparent costs, and paperwork handled.

Ready to simplify your global payments? Try Infinity- Sign Up!

Frequently asked questions

Which is better, NEFT or RTGS?

NEFT works best for routine, smaller payments. RTGS is the better option for large, time-sensitive transfers because it settles in real time and confirms instantly.

Which is better for a ₹2 lakh  transaction NEFT or RTGS?

Both work, but pick RTGS for instant settlement; pick NEFT if timing is flexible.

What is the limit of NEFT and RTGS?

NEFT has no fixed minimum or maximum (bank limits may apply), while RTGS starts at ₹2 lakh with no upper limit.

What are the disadvantages of RTGS?

It can cost more than NEFT (especially at a branch) and doesn’t make sense for smaller, routine payments.

How is IMPS different from RTGS and NEFT?

IMPS is instant and available 24×7 for smaller-value transfers (commonly up to ₹5 lakh), while RTGS is for high-value transfers (₹2 lakh+), and NEFT is batch-based for routine transfers.