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What is NEFT transfer and the maximum limit for NEFT transfer?

What is NEFT transfer and the maximum limit for NEFT transfer?

One of the most popular ways to transfer money between bank accounts is using NEFT. This is as a result of the many advantages it provides. The main advantage of NEFT is the lack of fees for online transfers and the absence of a maximum NEFT transfer cap. It is perfect for quick, high-value transactions because beneficiary accounts are credited in 30 minutes. It is very simple to understand how NEFT transfers operate and how to send money using NEFT. This article will go into more detail on NEFT money transfers.

What is NEFT transfer and the maximum limit for NEFT transfer?

What is NEFT transfer and the maximum limit for NEFT transfer?

What is NEFT transfer?

The National Electronic Funds Transfer (NEFT) is a fund transfer method launched by the Reserve Bank of India (RBI). Started in November 2005, the setup was established and maintained by Institute for Development and Research in Banking Technology. With NEFT, banking customers in India can send money directly between any two NEFT-enabled bank accounts. Electronic messages are used for this.

NEFT has become the primary method of money transfer in India as the majority of banks now support it. These transfers can be made anywhere in the nation, save time, and are affordable.

Even though any person, corporation, firm, or business with a NEFT-enabled bank account is able to transfer money through NEFT, the user's bank must be a participant in the network.

Additionally, the user must be in active internet banking status. It should be noted that in order to complete any NEFT transaction, the sender must be aware of the recipient's bank account information, contact information, and IFSC code.

Key Takeaways

  • NEFT is a direct peer-to-peer digital payment system
  • This is possible between bank branches that support NEFT.
  • It does not include real-time money transfers. In other words, the transfer happens in half-hour periods.
  • There is no upper limit on the number of NEFT transactions.
  • The charge for NEFT transactions varies according to the amount.
  • With the use of the network of branches that support NEFT, it has PAN-India coverage.
  • Sender will get notification of the transfer to the recipient account through email or SMS.

What is the maximum limit for NEFT transfer?

Because there is absolutely no NEFT amount transfer cap imposed by the RBI, NEFT is frequently used to move money between bank accounts. This indicates that no minimum or maximum amount is necessary to complete a transaction using NEFT. Through NEFT, one can send as little as one rupee. The greatest sum that can be transferred using this method of funds transfer is also unrestricted.

It is crucial to remember that while the RBI may not have any restrictions on NEFT money transfers, particular banks may have.

Process of money transferring through NEFT

Detailed process of NEFT transfer is as follows:

Step 1

The client completes an application form with information about the recipient, including name, bank, branch name, IFSC, account type, and account number, as well as the amount to be transferred. The sender gives his or her bank branch permission to deduct money from his account and send the beneficiary the stated amount. Additionally, some banks also provide the NEFT function through ATMs, and this option is available through online banking.

Step 2

A message is prepared by the issuing bank branch and sent to its pooling centre (also called the NEFT Service Centre).

Step 3

The message is sent from the pooling centre to the NEFT Clearing Center (run by the National Clearing Cell, Reserve Bank of India, Mumbai), where it is added to the list for the following batch.

Step 4

The Clearing Center handles the fund transfers according to the destination banks and creates the accounting entries to collect money from the issuing banks (debit) and transfer it to the destination banks (credit). Then, through their pooling centre, bank-wise remittance messages are routed to the destination banks (NEFT Service Centre).

Step 5

The beneficiary clients' accounts are credited after the destination banks receive the inward remittance notifications from the Clearing Centre.

Process of money transferring through NEFT

Process of money transferring through NEFT

How long does it take for NEFT Transactions to settle?

Even on holidays, NEFT services are accessible at all times. These services are, however, paid for in batches every half an hour. As a result, NEFT transactions are cleared daily in 48-hour batches.

The first batch of NEFT transactions are settled starting at 12:30 AM and ending at 12:00 AM. This is done to make it possible to settle more transactions, which will shorten the NEFT settlement time and make it more convenient for users.

It should be noted that all NEFT transactions that occur within regular bank business hours are regarded as automated transactions that are started by the banks using "Straight Through Processing" (STP) protocols.

NEFT charges and fees

The following additional fees applied to NEFT transactions till December 2021 as a money transfer fee:

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

However, starting in January 2021, the RBI will no longer apply any fees to NEFT transactions made online. This initiative was launched to encourage online purchases. According to the RBI, no banks may charge their savings account holders for online financial transfers made through the NEFT (National Electronic Funds Transfer) system as of 1 January 2020.

About DNBC Financial Group

The DNBC Financial Group is a financial organization that operates in the global financial market. It offerscorporate and individual customers an intelligent digital payment system, a practical payment platform, and an easily accessible online money transfer/receipt service globally. DNBC facilitates SWIFT and SEPA payments to 170 countries and territories worldwide, offering our clients various transfer options at the lowest possible rate and with the shortest wait time.

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