National Electronic Fund Transfer is the full form of NEFT.
The process of electronically transferring money from one account to another is known as NEFT. Only NEFT-enabled inter and intra-bank transfers in India are available.
NEFT began in 2005 with 23 hourly batch settlements, which were later changed to 48 half-hourly batch settlements in 2019 to encourage digital functionality.
According to the Indo-Nepal Remittance Agreement, we can only send money to Nepal from outside India. The transaction limit is $50,000 per transaction, with a maximum of twelve transactions per year.
Features of NEFT
- RBI (Reserve Bank of India) maintains the database.)
- There is a 24-hour service provided.
Mandatory Information Required for NEFT
- Names of Beneficiaries
- Account Number of Beneficiaries
- Bank IFSC Code
Methods of NEFT
- Online – Through online methods, transactions can occur by providing the beneficiary’s
details. The Net Banking Limit is determined by the customer’s bank.
We can transfer money online through the net banking process. We need to log in with its respective bank and select an option like beneficiary’s name, account no., IFSC code, amount, method, etc.
Following submission, we must confirm via OTP, and money will be transferred within a few minutes.
- Offline – Offline service is available in the bank, and there is neither an upper limit nor a lower limit.
We can only transfer money offline in the bank by filling out the NEFT form with all of the beneficiary’s information, such as name, account number, IFSC code, amount, and method.
The process will be handled by a bank staff when the form and money have been submitted.
The following is a list of the bank’s approximate service charges.
|Sl. No.||Transaction Amount (in Rs.)||Approx. Charges apply by Bank|
|1.||Upto 10,000/-||Rs. 2.50+GST|
|2.||10,000/- to 1,00,000/-||Rs. 5+GST|
|3.||1,00,000/- to 2,00,000/-||Rs. 15+GST|
|4.||2,00,000/- and above||Rs. 25+GST|
Advantages of NEFT
- The money can be transferred in a short time (typically half to two hours).
- The procedure is straightforward, safe, and secure.
- The service is available 24 hours a day, seven days a week, 365 days a year.
- For online methods, there are no service fees.
Disadvantages of NEFT
- Because the method is based on batch settlement, fund transfers may be delayed.
- Only bank working days are available for offline service.
- Only transactions within India (excluding Nepal) are possible.
- During online transactions, there is always the risk of account hacking. To keep our data safe, we must use password protection.
- Offline transactions are subject to service fees.
- Each transaction is limited to Rs. 50,000/-.
In comparison to IMPS and RTGS, the NEFT service is slow. Every tool has its own set of benefits and drawbacks, and we must employ them appropriately. The goal of NEFT is to allow people to transfer money for as little as Rs. 1 using both online and offline methods.