Definition
NEFT (National Electronic Funds Transfer)
NEFT is an electronic system for transferring money between bank accounts across India, settled in batches around the clock.
NEFT moves funds from one bank account to another using the beneficiary's account number and IFSC. It is now available 24x7, and transfers are processed in batches, so the credit may take a little time rather than being instant.
There is generally no upper limit on the amount, and the RBI has waived NEFT charges for transactions done through online banking, making it cost-effective for larger transfers where instant settlement is not essential.
NEFT sits alongside RTGS (for large, real-time transfers) and IMPS/UPI (for instant smaller transfers) as one of India's core retail payment rails.
Related terms
- RTGS (Real Time Gross Settlement)RTGS is a system for large-value money transfers that are settled individually and in real time.
- IMPS (Immediate Payment Service)IMPS is an instant, round-the-clock interbank money transfer service available through mobile, internet and ATM channels.
- MICR and IFSC CodeMICR and IFSC are codes that uniquely identify bank branches for processing cheques and electronic transfers.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.