IMPS vs. NEFT: Which Fund Transfer Mode is Better?

In 2025, NEFT handled 850 million transactions worth INR 39.9 trillion. IMPS isn’t far behind, with nearly 480 million instant transfers in July alone. 

Chances are, you’ve already used IMPS or NEFT this month, maybe even today. But here’s the question: Are you using the right system for your needs? 

IMPS offers you convenience and speed, and NEFT gives you structure and scope. Selecting the right one can save you time, keep you free from delays, and improve your cash flow management.

In this blog, we’ll break down NEFT vs. IMPS, highlight their features, and discuss their impacts, so you can pair your payment style with your business priorities.

• IMPS allows you to send money at any time, immediately. This makes it ideal for emergencies or instant payments. NEFT is settled in batches and takes hours.

• In terms of limits, IMPS has a maximum limit per transaction of INR 5 lakhs, whereas NEFT is not subject to any maximum limit, and thus it is better for large or high-value transfers.

• NEFT inward transfers are never charged, while outward transfers can cost up to INR 25. IMPS is a bit pricier, varying with the bank.

• Both are safe RBI-governed platforms, but IMPS is optimized for speed and convenience, whereas NEFT is optimized for organized, high-volume, or pre-planned payments.

Immediate Payment Service, or IMPS, was introduced by the National Payments Corporation of India (NPCI) in 2010. It was meant to facilitate instant interbank electronic funds transfers in India.

You can transfer money through:

• Bank IFSC code and account number 
• Mobile number associated with MMID (Mobile Money Identifier)
• Even through ATMs, SMS, or banking apps

In contrast to previous systems, in which you waited for hours or even the next working day, IMPS sends 24/7 transfers in real-time, weekends and holidays included.

Features of IMPS

Here are the characteristics that make IMPS:

• Always available: 24x7, Saturdays and Sundays, and holidays as well.
• Instant credit: Credited in seconds.
• Multi-channel: Access via mobile banking, internet banking, and ATMs.
• Payments in real-time: Ideal for emergency transfers, salary payouts, and vendor payments.
• For everyone: Works well for both businesses (bulk payments, refunds) and individuals (client payments, collaborations).

Here’s what you need to do:

• Choose the IMPS transfer option. 
• Enter the recipient’s mobile number + MMID or account number + Bank IFSC code.
• Enter the amount to be transferred.
• Authenticate using your PIN, password, or OTP.
• An automatic Unique Transaction Reference (UTR) for the transaction is created, through which you can trace or refer to it.
• Money is transferred instantly, and both sender and receiver get confirmation.

The Reserve Bank of India initiated the National Electronic Funds Transfer (NEFT) in 2005. It implements a half-hourly (30-minute) batch financial settlement system on the basis of transactions settled during the day.

NEFT is the most popular and lowest-cost mechanism to send money, especially in case of non-urgent transactions. NEFT used to work only in banking hours previously. Now it is 24/7, so it's much more convenient.

Features of NEFT 

Here’s why NEFT is trusted across industries:

• Timely settlements: Payments are settled in half-hourly lots.
• Broad availability: Accessible via mobile banking, internet banking, and bank branches.
• No minimum cut-off: Ideal for small as well as sizeable transactions.
• Higher limits: Ideal for bulk or large-value business transactions.
• Secure system: Governed and controlled by the RBI, ensuring security and adherence.

How to use NEFT for payments?

Here’s how to use it:

1. Log in to your bank's mobile banking application, net banking site, or branch.
2. Choose the NEFT transfer option.
3. Input the beneficiary account number and bank IFSC code.
4. Input the payment amount and reference information.
5. Authenticate using your PIN, password, or OTP.
6. The system provides a UTR number for your transaction, which you can use for tracking or enquiries.

Funds are settled in the next available NEFT batch, and the sender as well as the receiver are notified.

Both are secure and trustworthy, but differ in speed, charges, and transaction limits. Your decision between them comes down to whether you need the payment done fast, at minimal costs, or with greater transaction leniency.

Let's compare NEFT vs. IMPS on three fronts:

NEFT vs. IMPS: Speed of transactions

NEFT is fast, but not instant. It processes transfers in half-hourly batches. While it now runs 24×7, including weekends, you’ll usually see a small wait before the funds are credited. For most business payments, this short delay is manageable, but it’s not as seamless as IMPS when every second counts.

By contrast, IMPS is designed for immediate transfers. The money is in the other person's account in seconds, even at midnight during a bank holiday. That's why it's usually the default choice when time is of the essence, such as paying a supplier straight away in order to stock up or sending money to a freelancer on the spot.

RTGS timing is restricted to banking hours, making it better suited for planned, high-value payments.

NEFT vs. IMPS: Charges 

NEFT is usually free. Most banks have removed charges for both individuals and businesses as per the RBI’s push for digital banking. Receiving money is always free. Sending money outward may come with a small fee, usually nil to INR 25. That makes it an attractive option if you’re handling large or frequent transfers. 

IMPS, however, may still involve small charges depending on the bank and transaction size. Many banks have waived these too, but some still apply fees, especially for higher-value IMPS payments. For a business that does dozens or hundreds of transactions in a month, these small charges can add up.

NEFT vs. IMPS: Transaction limits

NEFT has no upper limit. This flexibility is why large companies and SMEs prefer NEFT for high-value settlements, bulk supplier payments, and corporate-level transactions. 

IMPS, however, has a limit. Up to INR 5 lakh in most banks is the maximum per transaction. That works for small, everyday payments like vendor bills, subscription charges, or freelancer invoices, but that's not the case with moving a large amount of money.

For larger value transfers, businesses often rely on RTGS limit (INR 2 lakh minimum), which makes it ideal for very high-value transactions.

Here’s a complete comparison of IMPS and NEFT across multiple domains:

Ask yourself:

• Do I need the money to reach the recipient instantly? If yes, use IMPS.

• Am I sending a large amount where a delay is fine? If yes, choose NEFT.

• Is keeping transaction costs low more important than speed? NEFT is usually the better option.

• Do I make frequent, small-value payments? IMPS offers convenience and real-time processing.

• Is this a one-time, high-value, or bulk payment? NEFT handles it efficiently.

• Do I want to transfer money using just a mobile number or MMID? IMPS makes it simple.

• Do I prefer entering bank account details online or at a branch? NEFT works well.

• Do I need access 24×7, including holidays? IMPS never stops.

• Is this a structured or scheduled payment? NEFT is ideal.

• Do I want maximum reliability for high-value transfers with minimal administrative hassle? NEFT is the safer choice.

In short, your choice in IMPS vs. NEFT depends on urgency vs cost.

Different businesses have various payment requirements. Here’s how IMPS and NEFT can work for you across industries:

Retail:

• IMPS: Best suited for real-time customer refunds, immediate supplier payments, or spontaneous inventory buys.

• NEFT: Suitable for bulk vendor payments, settlement of vendors every month, or regular supplier transfers.

SMEs:

• IMPS: Ideal for rapid client payments, payment of subcontractors, or dealing with sundry expenses.

• NEFT: Most suitable for big-ticket purchases, regular vendor settlements, or payrolls for small teams.

Freelancers and entrepreneurs:

• IMPS: Enables immediate receipt of payments from customers or payment to collaborators at once.

• NEFT: Best for bulk high-value payments or scheduled high-value transactions where time isn't a matter.

Corporates:

• IMPS: Suitable for emergency transfer of funds, office-to-office payment, or priority vendor payments.

• NEFT: Best for bulk payroll disbursals, high-value vendor payoffs, or programmed financial payments.

IMPS and NEFT are both reliable means of transferring money within India. For business and freelancers, the decision is typically based on what is most important: speed, price, or payment size. IMPS provides you with instant payments 24/7, whereas NEFT provides organized, scalable payments with no ceiling.