The world of banking is full of complex terms and acronyms, and NEFT is one of them. NEFT stands for National Electronic Funds Transfer, and it has become an integral part of the banking system in India.
NEFT enables seamless transfer of funds from one bank account to another, irrespective of the bank and branch. In this article, we will explore the NEFT full form in banking, the history of NEFT, and the process of transferring funds using NEFT.
We will also discuss the benefits of NEFT and how it compares to other modes of fund transfer. So, let's get started and know the full form of NEFT in banking.
What is NEFT Full form in Banking?
NEFT stands for National Electronic Fund Transfer. It is a process in India that involves the electronic transfer of money from one bank to another. It was a project introduced by the reserve bank of India.
What is NEFT?
- It is a process in which a person can transfer money to any part of the world in little time. You can transfer small amounts of money anywhere in the world. A bank branch must be NEFT enabled to take part in NEFT-enabled transfers.
- It also allows corporate, businesses, and Individuals to transfer money electronically to other people or organizations having a bank account. Neft payments happen in batches against other forms of mechanism that clear transactions on an orderly basis. As the requests get stacked up, batches are cleared in an hourly manner to clear up the pending transaction.
- Neft was initiated in the year 2005 by the RBI and since then substantial no. of transfers take place using NEFT which shows the immense popularity of this mode of payment. It usually takes one day to transfer money from one account to the beneficiary account. Settlement and clearing of funds take place in batches according to the guidelines by the RBI. Such is the convenience level that nowadays small shopkeepers asked regular customers to pay using NEFT.
What are the steps for NEFT transfer?
1. Log into the internet page of your bank.
2. Select the fund's transfer option.
3. Cose the NEFT option from the fund transfer page.
4. Enter the recipient's name.
5. You can add a new beneficiary if you wish to. Then enter details such as bank branch, account no., IFSC, and type of account.
6. Verify all the details and confirm.
7. Enter the 4 digit OTP you receive on your mobile no. to confirm the recipient's name.
8. The beneficiary added will be ready to receive funds after the prescribed time.
9. After confirming the recipient's name, select the bank where the funds must be transferred from, put in the amount to be transferred, and click confirm button to initiate the transaction.
What do you need for NEFT?
If you have to use the NEFT mode of transfer, one needs to have a savings or current bank account. If you do not have a bank account you can still proceed with NEFT. You will have to visit a bank, with NEFT technology and proceed. The only problem is that transfer will be restricted to 50,000 rs.
Does NEFT have a transfer limit?
Transfers can be started from Rs 1. RBI has not set any limit for the process. It does not have any maximum limit but if it is a cash transaction, a person can transfer not more than 50,000 per transaction. Although some banks have set a limit like HDFC banks have a limit of 15 lakhs via NEFT. However, transfers to Nepal can not be over 50,000rs as a deal part of the Indo-Nepal remittance facility scheme
What are the benefits of NEFT?
- It is economical to use NEFT for transactions
- It is a very secure platform'
- It is a very fast and convenient process
- It does not require a physical presence at your bank it can be done online
What are the charges for NEFT?
The recipient of the money does not face charges but if you are the person who sent the money, you have to pay a certain amount to facilitate the transaction.
- Maximum of rs 2.5 (GST) for transfers up to 10,000rs.
- Maximum of rs 5 (GST) for transfers of more than 10,000 but less than 1 Lakh.
- Maximum of rs 15 (GST) for transfers of above 1 lakh and less than 2 lakh
- Maximum of rs 25(GST) for transfers above 2 lakh.
These charges may vary from bank to bank
What is the difference between RTGS and NEFT?
- NEFT is known as National Electronic Funds Transfer whereas RTGS is known as Real Time Gross Investment
- NEFT is done in batches so is slower whereas RTGS is done in real time and is faster
- NEFT has no limit on the minimum transfer amount whereas RTGS has a minimum limit of 2 lakhs.
- NEFT and RTGS both have no maximum limit.
- NEFT is suitable for a small amount of money whereas RTGS is suitable for large amounts
Conclusion
The above article mentions everything related to NEFT. It covers everything from what is NEFT full form in banking, steps for using NEFT, do NEFT have a transfer limit, the benefits of NEFT, the charges required for NEFT transfer, and the difference between NEFT and RTGS.
