NEFT – Meaning, Transaction Charges and Timings.

Last Updated on July 26, 2021

Introduction

Gone are the days when people need to visit banks for every transaction. Taking out time from a busy schedule to visit a bank is a very daunting task. But thanks to the advancement in digital technology. A revolution known as NEFT has changed the whole world. Now, you can do everything online. Be it paying bills, vendor payment, and whatnot!.

Table of Contents

• What is NEFT?
• Advantages of NEFT
• NEFT Transaction Timing
• Fund Transfer Limits
• Charges for NEFT Transaction
• Eligiblity Criteria
• Frequently Asked Questions

What is NEFT?

National Electronic Fund Transfer is a nationwide centralised electronic payment system implemented and governed by the Reserve Bank of India, for fund transfer from one bank account to another bank account from any location. It is a digital means of fund transfer from any bank branch to any firm, individuals, or company. Nowadays, It has become the widely used means of money transfer between two bank accounts. 

Now, let’s understand the procedure of executing transactions.

The transactions through National Electronic Fund Transfer is a straightforward and quick process. You have to follow the given instructions carefully:

1. The first and foremost step is to log in to your net banking account. If you don’t have an account, then go through the bank website and register yourself.
2. Once login, go to the Add payee section and mention your beneficiaries such as name, account type, account number, and IFSC code.
3. After that, choose NEFT as the mode of fund transfer.
4. Now, select the account to which you want to transfer money and also mention the amount you wish to transfer.
5. Finally, click on the submit button. Your transaction is complete.

Advantages of NEFT

• It allows fund transfer from any bank account of any branch to another.
• You don’t have to visit the bank to sanction demand drafts and cheques with the NEFT system. It reduces time and effort and makes the entire process efficient.
• There is no need to provide the physical documents for sending money.
• The electronic money transfer process is cost-effective and hardly takes a minute to complete.
• It also provides a facility for a one-way transfer of funds from India to Nepal.
• There is no set limit of amount transfer. However, the maximum amount per transaction in India is limited to 50,000 for cash-based remittances.
• A confirmation by SMS or email to beneficiary account credit is given.
• You can pay credit card dues, loan EMI and foreign exchange remittance.
• 24/7 availability of the system throughout the year.
• Transactions are in real-time and ensure security to both parties.

NEFT Transaction Timing

Transaction facility through NEFT is available round the clock throughout the year, including holidays. At present, this system operates in batches with an interval of half an hour throughout the day. There are 12 settlements from Monday to Friday (between 8 am to 7 pm) and on Saturdays (from 8 am to 1 pm). After regular banking hours, the transaction is an entirely automated process operated by a Straight Through Processing (STP) system by banks.

Fund Transfer Limits

There is no limit to fund transfer through National Electronic Fund Transfer. You can begin with a minimum of Rs. 1 and go high to any amount you want to transfer. But there is a limit of 50,000 with cash mode for a one-time fund transfer.

Reserve Bank of India (RBI) does not impose any limit on fund transfer through the National Electronic Fund Transfer system. However, the individual bank can put certain limits based on their own rules and regulations. If the fund transfer takes within a similar bank account, it hardly takes a fraction of time to complete the transaction process. But in the case of two different bank accounts, the transaction may take some time.

Charges for NEFT Transaction

Fund transfer processed online via internet banking using NEFT is not chargeable. There are no charges for inward transactions at the destination bank for giving credit to the recipient/ beneficiary account. However, for outward transactions, the charges are as below:

Besides that, charges applicable for fund transfer via NEFT from India to Nepal are available on the RBI website under Indo-Nepal Remittance Scheme. For more information for cross-border remittance to Nepal, check https://nsbl.statebank/remittance-from-india

Eligiblity Criteria

Any of the bank branch come under the NEFT scheme provided by the RBI is applicable for fund transfer through NEFT. Any of the corporate offices, industry, individuals, or organizations with a bank account can avail NEFT transaction process for bulk payouts, and bill payment.

Frequently Asked Questions

1. How long does it take to transfer money from NEFT?

Since NEFT is an electronic mode of fund transfer, it facilitates the quick transfer of funds from a bank account. However, the transaction can be processed within batches of bank settlement of one hour. So the time can vary from one to two hours.

2. How do I know that my NEFT transaction is successful?

You will receive a confirmation message on registered mobile and email as soon as the amount gets credited into the beneficiary account.

3. Do all bank branches come under the NEFT network?

To initiate fund transfer through NEFT, the bank branch must be NEFT enabled. The list of such bank branches is given on the RBI website.

4. Is the NEFT system restricted to a specific location?

Bank branches linked to NEFT can be located anywhere across the country. There are no restrictions or specific locations to access NEFT.

5. What happens if the funds are not credited to the beneficiary due to some reason?

If the fund is not credited to the beneficiary account, then the destination bank returns the amount within two hours of batch settlement.