Difference Between IMPS and NEFT

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Difference Between IMPS and NEFT
IMPS (Immediate Payment Service) and NEFT (National Electronic Funds Transfer) are two popular methods for transferring funds electronically in India. Here are the key differences between IMPS and NEFT:

1.Definition

IMPS (Immediate Payment Service):
  • A real-time inter-bank electronic fund transfer service available 24/7, including weekends and holidays.
  • Allows instant transfer of funds between accounts in different banks.
NEFT (National Electronic Funds Transfer):
  • An electronic fund transfer system that operates on a deferred settlement basis, typically in hourly batches during specified banking hours.
  • Funds are transferred in a few hours but are not instant.
2. Availability

IMPS:
  • Available 24/7, 365 days a year, including weekends and bank holidays.
  • Provides immediate confirmation of transfer.
NEFT:
  • Available during banking hours, typically from 8:00 AM to 7:00 PM on weekdays and some hours on Saturdays (exact hours may vary by bank).
  • Not available on bank holidays and Sundays.
3. Settlement

IMPS:
  • Real-time, instant settlement.
  • Funds are credited to the beneficiary’s account immediately.
NEFT:
  • Deferred settlement in hourly batches.
  • Funds are credited to the beneficiary’s account in one to two hours (during operational hours).
4. Transaction Limits

IMPS:
  • Varies by bank, but generally allows transactions up to ₹2 lakh per day.
  • Some banks may offer higher limits for IMPS transactions.
NEFT:
  • No minimum or maximum limit for transactions, but individual banks may set their own limits.
  • Suitable for both small and large transactions.
5. Charges

IMPS:
  • Transaction charges may apply, depending on the bank.
  • Charges are typically nominal and vary between banks.
NEFT:
  • Transaction charges may apply, but they are generally low.
  • Some banks offer NEFT transactions for free, especially for certain account types.
6.Usage

IMPS:
  • Suitable for urgent, real-time fund transfers.
  • Can be used for person-to-person (P2P), person-to-merchant (P2M), and other types of payments.
  • Accessible via mobile banking, internet banking, and ATMs.
NEFT:
  • Suitable for non-urgent fund transfers where immediate transfer is not required.
  • Commonly used for regular payments like bill payments, salary transfers, and vendor payments.
  • Accessible via internet banking, mobile banking, and bank branches.
7.Summary

IMPS (Immediate Payment Service):
  • Real-time, 24/7 availability.
  • Instant fund transfer with immediate confirmation.
  • Typically used for urgent transactions.
  • May have transaction limits and nominal charges.
NEFT (National Electronic Funds Transfer):
  • Deferred settlement during banking hours.
  • Fund transfer in hourly batches.
  • Suitable for regular, non-urgent transactions.
  • Generally, has lower charges and no transaction limits.