What is RTGS?
RTGS stands for real time gross settlement, which means that it enables money to move from one bank to another on a real time and gross basis. Simply put, real time means the beneficiary bank receives the instructions for fund transfer immediately and gross means that it is not bunched with any other transaction and settlements of funds transfer instructions happen individually. Since the funds settlement takes place in the books of the any financial institution, keep in mind that the payments are final and irrevocable.
What is NEFT?
Neft stands for National Electronic Funds Transfer and is a payment system which facilitates one-to-one funds transfer. Like RTGS, Neft also transfers funds from one bank, but unlike RTGS the settlement takes place in batches (that may include transfers from various individuals) rather than individually. The batches are settled in hourly time slots.
How is RTGS different from Neft?
Timing: As mentioned above, Neft operates in hourly batches: The RTGS window is available from 8 am to 16.30 pm on weekdays and working Saturdays. In case of NEFT, currently there are twelve settlements from 8 am to 7 pm. However, the timings that the banks follow may vary depending on the customer timings of the bank branches.
Amount: As far as Neft goes, it does not have a minimum or maximum limit of amount you can transfer. But the maximum amount per transaction is also limited for cash-based remittance and remittance to Nepal.
As far as RTGS goes, it is mostly meant for large transactions. it also has a minimum amount that can be reached through remitted. RTGS does not have an upper ceiling for transactions.
Charges: For Neft, inward transactions (when you receive funds via Neft) are free, as no charges are to be levied from the person to whom fund are being transferred to. When you use Neft to make an outward transaction (when you send funds via Neft) at a bank branch for amounts up to N500,000 below, the charge is up to N105 plus service tax. For transactions above N500,000 and up to N1m, the charge is up to N210 plus service tax.
For RTGS, inward transactions (when you receive funds through RTGS) are free.