NEFT: National electronic funds transfer

NEFT: National electronic funds transfer 

What is it: NEFT enables funds transfer from one bank to another but works a bit differently than RTGS since the settlement takes place in batches rather than individually, making NEFT slower than RTGS.

The transfer is not direct and RBI acts as the service provider to transfer the money from one account to another. You can transfer any amount through NEFT, even a rupee.

You won’t have to pay any fee for inward transfer of funds, but for outward transactions the charges can be from Rs5-Rs25 depending on the amount transferred.

When do you need it: You can use this facility if you want to transfer funds online in a day or two.

NEFT can make life easier for those who need to send money to their parents or children living in another city. It cuts the trouble of issuing a cheque or draft and posting it.

NEFT, too, can be done only through Internet banking.