IMPS Vs NEFT: Difference, Usage, Which bank offers them

The Payment methods offered by banks are IMPS, NEFT, and RTGS. In this article, we will be comparing IMPS vs NEFT in detail. All three modes are used for transferring money electronically. So you simply need an internet connection and a mobile or laptop/system and you can quickly pay school fees, the premium for your life insurance policy, EMIs, or invest in mutual funds. It eases the process of financial planning and tax planning for you.

IMPS means Immediate Payment Service. It is an electronic fund transfer system of the Indian banking system. It transfers funds to the payee’s bank account instantly. This service is available for the customers 24*7. The major feature of IMPS is that it is available at all times for usage. It transfers funds instantly and is a great banking platform in case of emergencies. The transaction charges of this platform are also very less and the transfer limit is also considerable, approximately Rupees 2 lakhs per day. Moreover, IMPS is available on mobile too which makes it super-convenient.

National Electronic Fund Transfer (NEFT) is a payment system that allows the transfer of funds from one bank’s account to another. With an increased focus on online banking, NEFT has become one of the most popular ways of transferring funds. Since it can electronically transfer funds from any bank branch to any individual, it has eliminated the need to visit a bank branch for the transfer of funds.

IMPS vs NEFT

Below we discuss IMPS vs NEFT in detail:

1. Details:
   • The Immediate Payment Service (IMPS) is built on the National Financial Switch network and is managed by the National Payments Corporation of India (NPCI).
   • While the National Electronic Fund Transfer (NEFT) is managed by the Reserve Bank of India. The IMPS was launched in 2010 while NEFT was brought forth in the year 2005.
2. Process: 
   • IMPS transfer your money instantly into the beneficiary’s account. The beneficiary’s bank has around half an hour to credit and shows the transferred money to the payee.
   • Meanwhile, NEFT works on a net and batch basis. NEFT transfer mechanism makes payments in batches. Since NEFT settles on a one – to – one basis, it transfers funds between two enabled bank accounts through electronic messages.
   • NEFT isn’t a real-time fund transfer solution like IMPS. As mentioned, it transfers funds in batches and that too only in its business hours. 
3. Timings: 
   • IMPS can be used 24 x 7 while NEFT is only available in NEFT business hours.
   • NEFT payment system usually makes 23 settlements in a day which occurs between 8 A.M. and 6.30 P.M. This too only happens on weekdays and the 1^st, 3^rd and the 5^thSaturday of a calendar month.
   • NEFT is not a 24 x 7 fund transfer service and it isn’t available on Sundays, bank off-days and bank holidays altogether.

Difference Between IMPS and NEFT

Usage through Net-banking

For IMPS

• To carry out an IMPS transfer through net-banking, you need to log into your bank’s net-banking portal.
• After that, you need to add an IMPS beneficiary by inputting the beneficiary’s account no., account type, IFSC Code, name and contact details.
• After your bank confirms that the intended beneficiary has been included, you need to go to the tab of the IMPS Fund Transfer. You then need to select the beneficiary to whom you want to transfer funds.
• Once you do that the beneficiary’s account details will appear. You then need to enter the Amount and Remarks.
• Verify the payment and the transaction will be complete. Since this is IMPS, funds will be transferred immediately.

For NEFT

• To carry out an NEFT transfer through net-banking, you need to log into your bank’s net-banking portal.
• After that, you need to add an NEFT beneficiary by inputting the beneficiary’s account no., account type, IFSC Code, name and contact details.
• After your bank confirms that the intended beneficiary has been included; you then need to go to the NEFT Fund Transfer tab.
• Subsequently, you need to select the beneficiary to whom you want to transfer funds. Resultantly, the beneficiary’s account details will appear.
• You then need to enter the transfer Amount and Remarks. Entering remarks is optional. Your NEFT funds will reach the beneficiary in the next hourly batch transfer.

Usage through Mobile-banking:

For IMPS

• To carry out an IMPS transfer through mobile banking, you need to log into your bank’s mobile banking application, then you need to go to the Send Money/Fund Transfer tab to visit the IMPS option.
• After that, you will have to add the beneficiary to the IMPS platform.
• After the bank adds your IMPS beneficiary, you need to enter Beneficiary mobile no., Amount and the beneficiary’s Mobile Money Identifier (MMID).
• The application will then ask for your Mobile PIN (MPIN) to authenticate the transfer. Once you verify your Mobile PIN, your money will be transferred.
• The bank will then send you a confirmation text message mentioning the transaction no. Since this is IMPS the funds will be credit instantly into the payee’s bank account.

For NEFT

• To carry out an NEFT transfer through mobile banking, you need to log into your bank’s mobile banking application, then add the beneficiary in the NEFT platform, if not already added.
• For adding the beneficiary you need to input the beneficiary’s account no., account type, IFSC Code, name and contact details; after your bank confirms that the intended beneficiary has been included, you need to go to Send Money/Fund Transfer tab and then go to the NEFT option.
• Then you need to select the beneficiary to whom you want to transfer funds. Subsequently, the beneficiary’s account details will appear.
• You then need to enter the Amount and Remarks. Once you verify the payment settlement, the funds will be transferred in hourly batches.

Transaction Charges:

The transactional charges for NEFT and IMPS also differ. NEFT and IMPS charges are decided on the bank’s discretion. NEFT charges start from a minimum of Rupees 1 per transaction and go up to Rupees 25 per transaction. IMPS charges usually start from a minimum of Rupees 5 per transaction and can go up to Rupees 15 per transaction.

Transaction Limit:

The minimum transaction value of NEFT and IMPS transactions usually is Re. 1. However, the maximum limit for NEFT varies from bank to bank; it usually can go up to Rupees 10 lakh per transaction. The maximum transfer limit of funds through IMPS can go up to Rupees 2 lakh in a day.

Which banks offer NEFT and IMPS services?

All the Nationalised Banks are offering NEFT and IMPS services. Some of the examples are as follows:

• Andhra Bank
• Allahabad Bank
• Axis Bank net banking
• Bank of India
• BNP Paribas
• Canara Bank
• Citibank
• Dena Bank
• Federal Bank
• HSBC
• HDFC Bank
• IDBI Bank
• ICICI Bank
• Indian Overseas Bank etc.

Other electronic fund transfer platforms

RTGS transfers funds in real-time which means there is no waiting period while transferring funds. It doesn’t bundle your fund transfer settlement with other fund transfers. Through RTGS, your funds are not transferred in batches like they are in NEFT. With RTGS, your funds are not clubbed with payments of other users; your funds are transferred individually and they end up in your beneficiary’s account faster than NEFT transfers. The RTGS window is usually open from 8 a.m. to 4.30 p.m. on weekdays and 9 a.m. to 2 p.m. on Saturdays. Sundays are not included in RTGS business hours.

Points to consider while making an IMPS vs NEFT transfer

There are many factors to consider before transferring funds through NEFT and IMPS. Some of them are Timings, Transaction charges, and transfer network. Let’s discuss each individually:

• Timings: If you want to make an instant transfer, then choose IMPS. You can make NEFT transactions only in NEFT business hours.
• Charges: NEFT and IMPS both charge the payer for sending funds. However, NEFT and IMPS don’t charge the payee for receiving funds. NEFT and IMPS transaction charges differ from bank to bank and their limits are provided in the article above.
• Transfer Network: The payer needs to check whether the beneficiary is part of the NEFT or IMPS network as all banks or all branches across India might not be a part of this network.

This blog on IMPS vs NEFT is to make you aware of its working, difference and the other information. Our company WealthBucket is a CA/CS Firm providing different services related to Mutual Funds like investing in Large Cap Mutual funds, Equity Funds, Debt Funds, etc.

You can contact us on +91 9999379929 or you can mail your queries on our mail contact@wealthbucket.in.

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