Fund transfer is one of the most important processes which keeps a business running. Though there are several ways available through which such transactions can be made, however, two ways out of the existing ones which include — NEFT (National Electronic Funds Transfer) and IMPS (Immediate Payment Service) are among the most used methods for transferring funds.
Another way for fund transfer is the Real Time Gross Settlement (RTGS).
Though all these three ways are among most used by business people for fund transfers having their own advantage and disadvantages, so let's compare them out in order to get more clarity over which way is best suited for your business.
Immediate Payment Service (IMPS)
- Maximum fund transfer limit is Rs 2 lakh.
- No lower limit for transferring funds.
- Processing charges apply depending on the amount being transferred.
- No need for the beneficiary's bank account details. One just needs to enter his/her Mobile Money Identifier (MMID), a unique 7-digit number — for transferring funds.
- Transactions take place in real-time.
National Electronic Funds Transfer (NEFT)
- No upper limit for transferring funds.
- NEFT has now been made a 24-hour service even available on bank holidays.
- Following a review of monetary policy in July this year, RBI has said transaction charges on NEFT and RTGS will not be applicable from January 2020.
- Requires details of the beneficiary such as bank account, IFS code. The process can be done through internet banking.
- No real-time transactions, take place in half-hourly batches.