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The full form of NEFT is National Electronic Fund Transfer, it is a secured and reliable way of transferring funds electronically from the sender’s account to the beneficiary's account. NEFT has become one of the most popular mediums for transferring funds among individuals, government institutions, and business people. Therefore, one must develop a detailed understanding of all the relevant NEFT information for efficient financial management.
What is NEFT?
NEFT is an Indian electronic system of payment that allows hassle-free fund transfers from one bank to another. The processing of NEFT transfers occurs in batches throughout the bank's working hours. It offers a reliable and safe way for various payment purposes, including bill payments, payment of salaries, investments, and repayment of loans. Anyone who holds a bank account in India can entertain access to NEFT. It is, however, regulated by the Reserve Bank of India.
How Does NEFT Work?
After knowing what is NEFT, it is essential to understand how it works. You can get a detailed understanding of the working of NEFT by reading all the points mentioned below:
- The first step towards initiating an NEFT transaction is done by the sender, who intends to transfer funds to the beneficiary account. For this, the sender must provide the beneficiary's bank details, such as their name, bank name, bank account number, branch name, and IFSC code.
- Once the sender completes the process, the sender’s bank receives the NEFT transaction request. The transaction is then processed by the bank and sent to the NEFT clearing house.
- The NEFT clearing house then processes the transaction, which is forwarded to the beneficiary's bank account.
- On successful transfer of the fund to the beneficiary’s bank account, a confirmation message is sent to the sender.
What are the benefits of NEFT?
National Electronic Fund Transfer, or NEFT, offers numerous benefits for account holders and individuals who use it. These are as follows:
- NEFT offers a reliable and secure way of transferring funds. As the fund is transferred electronically, the settlement is done through a secure network, and RBI regulates the system to ensure the utmost safety.
- NEFT charges are usually nominal. Therefore it is considered to be a cost-effective way of transferring funds. The bank's NEFT charges are lower than other electronic payment systems.
- Since NEFT can be easily done through mobile banking or net banking, it offers the utmost convenience to people as there’s no requirement to visit the bank branch or the ATM.
- NEFT facility entertains a nationwide availability as any bank account holder in India can access it.
- NEFT also offers fast and timely services as the transactions are processed in batches which are settled on a half-hourly basis throughout RBI working hours. Therefore the transfer of funds mostly happens promptly.
- Another mentionable benefit is that the status of the transaction can be tracked through the bank account of the sender or the beneficiary.
How to Transfer Funds through NEFT Online?
Well, the process is quite simple. All you need to do is follow some simple steps, and you are all done.
- First, you need to log into your net banking account. Fill in the correct User ID and password to log in successfully.
- A dashboard will appear. You will find several options; select NEFT among all the given options for payment.
- A new page will pop up asking the bank details of your beneficiary. Fill in all the details carefully, such as the account number, IFSC code, bank and branch name, among other relevant information.
- Next, enter the amount you intend to transfer to the beneficiary account. You also need to schedule the transfer by choosing the date and time when you want to initiate the transfer.
- Review all the transfer details, including the beneficiary's bank account number and the time slot.
- Once all the details are confirmed and reviewed, it’s time to authorize the transaction using your Internet banking credentials, or you can also do it by generating an OTP.
- Once the transaction is authorized, you will be notified with a confirmation message to your registered phone number or email ID.
How to Transfer Funds through NEFT Offline?
To transfer funds through NEFT offline, follow the steps mentioned below:
- First, you need to visit your nearest bank branch and fill in the NEFT application.
- Next, fill in the details of your benefit’s bank account.
- Enter the amount that you wish to transfer.
- Make the payment of the applicable fees for the transaction.
- Provide authorization for the transaction by signing the NEFT application.
- Apply to the bank executive, after which verification and authorization will be done on behalf of the bank.
- Once all the details are verified and authorized, you will receive a confirmation on your registered mobile number or email ID.
How to Track NEFT Transaction Status?
To track NEFT transaction status, visit your bank’s website and log in to your net banking account. Then check the transaction history section. You can also track the status by using the transaction reference number. If you still fail to track it.
Who can make NEFT Transactions?
NEFT transactions can be made by any individual who is a bank account holder with an NEFT-enabled bank. The beneficiary and the sender must have a bank account with NEFT enabled bank to transfer funds using NEFT successfully.
What is the NEFT Transfer Limit?
The limit of NEFT transfer depends on the bank and an individual's account type. Generally, most banks offer a minimum limit of Rs. 1 for NEFT transfers and a maximum of Rs. 10 Lakhs per transaction. The maximum limit can be higher for business and corporate accounts.
Prerequisites for NEFT Transfer
There are several prerequisites for making NEFT transactions successfully:
- It is essential for the sender and the beneficiary to have an NEFT-enabled bank account.
- The sender must have the correct bank details and other relevant information about the beneficiary's bank account.
- There must be sufficient funds in the sender's bank account to transfer to the beneficiary’s account.
- The transaction initiation must be done within the cut-off time specified by the respective bank for processing the transaction on the same day.
- The sender must know the NEFT charges and the minimum transaction limit before initiating any transaction.
Prerequisites for NEFT Transfer
There are several prerequisites for making NEFT transactions successfully:
● It is essential for the sender and the beneficiary to have an NEFT-enabled bank account.
● The sender must have the correct bank details and other relevant information about the beneficiary's bank account.
● There must be sufficient funds in the sender's bank account to transfer to the beneficiary’s account.
● The transaction initiation must be done within the cut-off time specified by the respective bank for processing the transaction on the same day.
● The sender must know the NEFT charges and the minimum transaction limit before initiating any transaction.
What are essential details Required for NEFT Fund Transfer
Several essential beneficiary bank account details are required for NEFT fund transfer. These include the correct account number, the account type, the bank name and branch of the beneficiary, and the IFSC code.
What are the chances and reasons of failure of NEFT Fund Transfers
Despite being a reliable and safe fund transfer method, NEFT might fail for the following reasons:
- Insufficient funds in the sender’s bank account.
- Incorrect bank details of the beneficiary.
- Technical glitches.
- Discrepancy in the account name of the sender
- Beneficiary’s bank account not being a part of the NEFT network.
Charges Applicable on NEFT Transactions
The charges application for NEFT transactions vary from one bank to another depending on several factors, such as the account type of the sender, total transaction amount, and the mode of transaction. However, the RBI has set limits on the bank charges against NEFT transactions which are as follows for various transactions:
|Transaction Amount||Fee Amount|
|Less than or equal to Rs. 10,000||Rs. 2.5|
|Between Rs. 10,000 and Rs. 1 Lakh||Rs. 5|
|Between Rs. 1 Lakh and Rs. 2 Lakh||Rs. 15|
|Equal to or more than Rs. 2 Lakh||Rs. 25|
Who is Eligible to Transfer Money Via NEFT from One Bank to Another?
Anyone can transfer money via NEFT from one bank to another having a bank account member of the NEFT network.
List of Major Banks Providing NEFT Facility
- State Bank of India (SBI)
- Punjab National Bank
- Axis Bank
- ICICI Bank
- HDFC Bank
- Canara Bank
- Union Bank of India
- Bank of Baroda (BOB)
- Indian Bank
- Bank of India (BOI)
These are some of the most popular banks in India offering NEFT transactions, there are many others. You can contact your bank branch to know whether it entertains NEFT transactions.
Difference between NEFT, UPI, and RTGS
Here's a simple breakdown of the differences between NEFT, UPI, and RTGS:
|Minimum Transfer amount||Rs. 1||Rs. 1||Rs. 2 lakh|
|Payment Option||Online and Offline||Online||Online and Offline|
|Maximum Transfer Va||No limit||Rs. 2 lakh||No limit|
|Transfer Time||Up to 30 minutes||Immediate||Immediate|
|Service availability||Available 24×7||Available 24×7||Available 24×7|
|Inward Transaction Charges||No charges||No charges||No charges|
|Details Required||Account No. and IFSC Code||VPA of beneficiary/QR code/Account No. and IFSC||Account No. and IFSC Code|
To sum up, considering NEFT advantages and disadvantages it can be said that it is quite an affordable and convenient method of transaction. However, it is essential to provide the correct bank account details of the beneficiary to ensure that funds are credited to the right person.
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Frequently Asked Questions
Yes, fund transfer through NEFT comes with some limits. However, the limit might differ from one bank to another.
Regarding RBI guidelines, the minimum amount to be transferred is rs. 1, with no maximum limit. The best option would be to check the maximum limit of your bank.
Writing the beneficiary's wrong account number might lead to transferring the money to the wrong bank account. This, however, lowers the chance of getting your money back. Several factors affect the chance of recovering your money, such as the cooperation of the account holder to whose account the money got transferred and your bank;s promptl]ness in getting back to you after you request a refund.
The time taken for an NEFT payment to be settled depends on the time of initiation of the transaction and the batch processing of your bank. The settlement of NEFT transactions is done in batches, and the RBI fixes the hourly cycles of the settlement of NEFT transactions throughout the bank’s working hours. Generally, NEFT transactions are credited to the beneficiary account within two hours.
But in some cases, it might take longer.
The time taken for transferring funds to the beneficiary’s bank account through NEFT depends on several factors, such as the total amount transferred, the time of initiation of the payment, and the time taken by the bank for processing. The operation of NEFT happens in hourly batches from 8 A.M to 7 P.M on all bank working days. Typica; lately, NEFT transfer takes a minimum of a few minutes to a maximum of two hours to reflect in the beneficiary account. However, in some cases, there might be a delay.
Various transactions can be done through NEFT besides regular fund transfers. These include payment of credit card bills, utility bills, insurance premiums, e-commerce transactions, donations to NGOs and other charitable institutions, or fund transfers to NRO or NRE accounts.
No, it is impossible to transfer money to a bank account outside India using NEFT, as it allows electronic fund transfer only in India.
If there are any complaints related to NEFT transactions, one can approach their respective bank’s customer care department or the NEFT Customer Facilitation Centre (CFC). The contact details of CFC are easily available on the bank website.
You can cancel the NEFT transaction, but it must be done before funds are reflected in the beneficiary's bank account. If you intend to cancel the NEFT, you must contact your respective bank as early as possible and place your request to cancel the transaction. If the fund is already transferred to the beneficiary’s account, it’s impossible to cancel. However, you can approach the beneficiary with a request to return the transferred amount.
NEFT transfers can be done on sundays, but the transaction settlement would not occur on Sundays and bank holidays. Therefore despite initiating the transaction on sunday or any other bank holiday, it will be settled on the next working day.