Full Form of NEFT

The full form of NEFT is National Electronic Funds Transfer.

There were times in the past when people had to spend at least half a day in the long queues at banks, just for transferring money. But, thanks to the major developments in banking technologies, now we can finish most of our banking transactions from the comfort of our homes. It is also essential, along with technological advancement, that you have a basic knowledge of internet banking. Hence, in this article, we will talk about NEFT, which is one of the most used and efficient means of transferring money in India.

What is NEFT or National Electronic Funds Transfer?

National Electronic Funds Transfer or NEFT is a mode of money transfer that enables one-to-one payments within India. It is owned and operated by the Reserve Bank of India, and by using this service you can transfer your money from one account to another. Transfers may be initiated between two bank accounts from the same or different banks. But, this type of transfer can only be made if your bank is NEFT-enabled.

The purpose of NEFT was to build an efficient, secure, and cost-effective system for electronic fund transfers. NEFT is now available 24 hours a day, 365 days a year. Before December 2019, NEFT transactions were settled weekdays between 8 a.m. and 7 p.m. Additionally, on the first and third Saturdays from 8 a.m. to 1 p.m. The system continued to be inaccessible.

The electronic technology provides secure settlement and near-real-time payments transfer to the beneficiary account. The RBI does not assess member banks any fees for NEFT transactions.

Funds to be transferred through NEFT are cleared by the banks on a half-hour basis, meaning that the receiver will get the funds after half an hour from the time the transaction has been initiated.

NEFT: Transfer Limits and Charges

There are no upper or lower limits for fund transfer through NEFT imposed by the RBI. But, it is upon the banks to set their own upper limits on transactions per day. Therefore, you need to confirm with your bank about the NEFT fund transfer limits first, before initiating a transaction.

NEFT transfers done through internet banking or mobile banking apps do not cost anything. But, if the transaction is done through the bank branches then a nominal charge is applied based on the transfer amount. This is the basic schedule for the charges on NEFT transactions. It might differ from bank to bank.

NEFT: Provisions for International Transactions

You can transfer money through NEFT only within the Indian borders, with a rare exception of Nepal. If you have your family, business or friends in Nepal, you can transfer your money to them using NEFT. Even if the Nepalese benefactors do not have a bank account with a bank in Nepal, they can receive the fund transfer.

NEFT: Advantages

These are some of the major advantages of transferring your money through NEFT:

• In all the NEFT-enabled banks in India, funds can be transferred from one account to another.
• Throughout the year, you can access this facility 24/7, including holidays.
• Your money is securely transferred within half an hour.
• The emitter gets the confirmation of the transaction by SMS and email.
• For online NEFT transactions, you do not have to pay any charges.
• For transactions through NEFT, you do not need any cheques of demand drafts.
• Sending money through NEFT doesn't even require you to visit your bank.
• Through the NEFT system, you can also pay your loans, EMIs, credit card bills, and utility bills

NEFT: How to Initiate Transaction?

These are the steps to be followed in order to transfer funds through NEFT:

1. First, you have to log in to your internet banking account on your computer or laptop, or mobile device.
2. Then, select NEFT on the Fund Transfer tab.
3. You have to now choose the beneficiary or you have to add it by clicking on the Add Beneficiary tab.
4. You have to enter the details such as the name of the bank, account number, IFSC code, etc.
5. After you have added the beneficiary, you might have to wait for some time. This time varies from bank to bank. For example, In IDBI bank you can transfer funds to a beneficiary 30 minutes after the beneficiary adding process.
6. Confirm the details of the beneficiary - account number, name, and mobile number (for SMS notifications). Make sure that you check the details carefully before initiating the transaction.
7. Now, you can enter the OTP, sent your Registered Mobile Number, and complete the transaction.

A confirmation message will be sent to both, you and your beneficiary, confirming the transaction.