RTGS vs NEFT: Charges, Limits and Which to Use

NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement) are two electronic payment systems run by the Reserve Bank of India (RBI). Both move rupees between bank accounts inside India. The difference comes down to size and speed:

• NEFT settles in half-hourly batches, has no minimum amount, and is free online.
• RTGS settles each transaction on its own in real time, and starts at ₹2 lakh.

For a business, that usually splits by job. You run salaries, vendor bills and utility payments on NEFT, and large supplier or property settlements on RTGS when the credit has to land at once. Neither rail moves money from an overseas client, though. To collect international payments, you need a cross-border route that converts foreign currency to INR before it reaches your account.

The short rule: under ₹2 lakh or routine, use NEFT. At ₹2 lakh or more and urgent, use RTGS.

Regulatory position as of 2026, per RBI. Banks set their own charges within RBI ceilings.

NEFT stands for National Electronic Funds Transfer. It is an RBI-operated system that moves money from one bank account to another across nearly every bank in India.

NEFT is one form of electronic fund transfer, run on deferred net settlement. Instead of clearing each payment the moment you send it, the system groups transactions and settles them in half-hourly batches through the day. Once a batch settles, the beneficiary's account is credited, usually within about two hours.

NEFT works well wherever a short wait costs you nothing:

• Salary and payroll runs: you can push dozens of credits in one file and let the next batch clear them, since staff rarely need the money in the same minute.
• Vendor and supplier payments: routine invoices settle fine on batch timing, and online NEFT keeps the cost at zero even on large monthly runs.
• Utility bills, EMIs and tuition fees: recurring, predictable payments where a two-hour window is never a problem.
• Small one-off transfers: with no minimum, NEFT handles a ₹500 payment as easily as a ₹5 lakh one.

RBI sets no minimum or maximum on NEFT, though your bank may apply its own per-transaction limit. Walk-in cash transfers without an account are capped at ₹50,000. NEFT has run 24x7x365 since December 2019.

RTGS stands for Real Time Gross Settlement. As RBI defines it, funds settle "individually on a transaction-by-transaction basis" with no netting. Each payment clears on its own the moment it is processed.

That gives RTGS two strengths NEFT does not match:

• Speed: the credit is near-instant rather than held for the next batch, so the beneficiary can act on the money straight away.
• Finality: each transfer settles one-to-one with the central bank, which means it cannot be reversed or netted off, the assurance a seller wants before releasing goods or documents.

Those qualities suit large, time-sensitive movements:

• Property and real-estate payments: the seller usually wants confirmed, irreversible funds in hand before registration, which RTGS provides in minutes.
• Large vendor or supplier settlements: a ₹10 lakh payable that must clear today to hold a delivery or a contract term.
• Corporate treasury and inter-company transfers: high-value movements between group accounts where same-day certainty matters more than a few rupees of fee.

The trade-off is the floor. RTGS carries a minimum of ₹2 lakh, so it is not an option for smaller payments. There is no upper limit. RTGS has been available 24x7x365 since December 2020. For a fuller walkthrough, see our guide to real time gross settlement.

RTGS is faster. Because each transaction settles in real time, the money usually reaches the beneficiary within about 30 minutes, and often within a few minutes.

NEFT is not slow, but it waits for the next batch. Send a transfer just after a batch closes and the credit can take up to about two hours.

For a payment where the exact minute matters, such as a registration deadline or a settlement, RTGS is the safer call.

For most people, neither is cheaper online, because both are free. Since January 2020, banks cannot charge savings account holders for NEFT started online. RTGS through net banking or a bank app is usually free too. RBI itself stopped charging banks a processing fee back in July 2019.

Charges only appear at a branch, and even then they are small and capped by RBI:

RBI caps branch RTGS at ₹25 (₹2 to 5 lakh) and ₹50 (above ₹5 lakh), plus GST, as of 2026. Banks may charge less. Online transfers are generally free.

So "which is cheaper" is mostly a myth for online users. The real decision is speed and the ₹2 lakh floor, not price. Cross-border transfers work differently, where the true cost of international payments is mostly the exchange-rate markup rather than a flat fee.

The most common question is simply which rail fits a given amount. This table settles it:

A quick way to remember it:

• Below ₹2 lakh: you have no choice, it is NEFT.
• ₹2 lakh and above: RTGS when timing matters, NEFT when it does not.
• Under ₹5 lakh and instant: IMPS is a third option, covered in our IMPS vs NEFT comparison.

Both systems ask for the same information, so switching between them needs no extra detail:

• Beneficiary's name: exactly as it appears on their bank account, since a mismatch is the most common reason a transfer is delayed or returned.
• Account number: the full account number of the person or business being paid, checked digit for digit.
• Bank and branch: the receiving bank and the specific branch that holds the account.
• IFSC code: the 11-character code that identifies that branch and routes the payment to it.

After the transfer, your bank generates a reference so you can track and confirm the payment. That is your UTR number. As of 2025, RBI also requires banks to offer a beneficiary name look-up for NEFT and RTGS, so you can confirm the recipient's name before you send.

NEFT and RTGS only move rupees between two bank accounts inside India. The moment the payer is overseas, neither applies. A client in the US or Europe pays in dollars or euros, and that money arrives as an international wire, not a domestic transfer.

For Indian exporters and IT/ITeS businesses, the real cost sits here, in the foreign-exchange conversion and the paperwork, not the domestic leg. Traditional bank wires bundle a hidden exchange-rate markup with SWIFT fees, and the compliance documents can be slow to arrive. Knowing how SWIFT payments work makes those layers easier to spot.

This is the part Xflow handles on the international side, through a receiving account built for inbound foreign payments:

• A local account for your overseas customers: they pay into what looks like a domestic account in their own country, so you skip the friction and delays of a full SWIFT wire.
• Conversion at the live mid-market rate: you convert at the rate you see on Google, not a marked-up bank rate, which is where most of the hidden cost usually hides.
• Automatically issued eFIRA: the Foreign Inward Remittance Advice you need for FEMA and GST records is generated for you, instead of chased from the bank weeks later.

Xflow holds final PA-CB (Payment Aggregator – Cross Border) authorisation from the RBI for exports and imports, is ISO 27001 and SOC 2 certified, and settles to your Indian bank account the next business day. Once the funds land in INR, you use NEFT or RTGS as normal to pay staff or vendors onward.

IMPS (Immediate Payment Service) is the third domestic rail. It is instant, runs 24x7 and is capped at ₹5 lakh, which suits smaller urgent transfers that fall below the RTGS floor. Our guide to an IMPS transfer covers how it works in detail.

In short: NEFT for routine payments of any size, RTGS for high-value payments that must clear now, and IMPS for smaller urgent transfers.