Introduction
IMPS and NEFT are two methods of transferring the balance. Both are an instant system of money transfer from one account to the other account. The system of transfer of money is quite different in both options. IMPS offers mobile, net banking and SMS transfer services. These are all options for easy transfer of money. On the other hand, NEFT offers an interface to transfer money via net banking. The reserve bank of India regulates the NEFT.
IMPS were designed to quicken the process of transactions. Consumers can transfer the money without any hesitation.
IMPS vs. NEFT
IMPS stands for immediate payment services. As the name suggests, the main aim of IMPS is to provide quick transaction of money. It transfers money from one bank account to another bank account within a few seconds. Net banking, mobile and SMS are a few methods that help in the transaction of money.
The maximum amount of money allowed to transfer via IMPS is 2,00,000. It is open 24 x 7, even on Sundays and bank holidays. A person can transfer money sitting at home.
Different ways of IMPS have different requirements. For example, to transfer money via mobile, a person should have a 10-digit mobile number and MMID code. To transfer money via net banking, a person should have the receiver’s bank account number, IFSC code and bank holder name. Similarly, to transfer money via SMS, a person should have the receiver's mobile number.
Net banking and SMS banking needs confirmation from the bank. Both are done under the system of net banking. It can easily be done by a net banking app. However, mobile banking doesn’t require. A person can start mobile banking just by putting some information in the net banking app.
NEFT is a little different from IMPS. It is regulated by the reserve bank of India. It was first launched in 2005 to reduce the time in the transfer of money. The full form of NEFT is National Electronic Fund Transfer.
Today, NEFT is widely used by individuals, firms and cooperative businesses. It provides easy transfer of money from one bank to another bank. The reserve bank of India itself keeps an eye on all the transactions. This ensures that the transactions are 100 per cent safe.
The maximum limit transferred from one bank to another bank via NEFT is not fixed. It is different for different banks. A person must get this information before transferring money via NEFT.
Difference IMPS Between IMPS and NEFT in Tabular Form
| Parameter of comparison | IMPS | NEFT |
| Transfer methods | Net banking, mobile, SMS | Net banking |
| Manager | National payment corporation of India |
The reserve bank of India
|
| Transaction of charges | INR 2.5 TO INR 25+ GST | No charges |
| Transaction timing | Real-time transfer | Takes nearly 2 hours |
| Maximum amount of transaction | INR 2,00,000 | Not specified (different for different banks) |
| Service availability | Online | Online and offline |
What are an IMPS?
IMPS or immediate payment service is an electronic-based instant fund transfer service that transfers money from one account to another account. It transfers money between the bank as well as external banks. In simple terms, a person can transfer money immediately with the help of IMPS.
IMPS offers real-time transfer of money that can be transferred within seconds. The transfer of money can be done from anywhere in the world. It is open 24 x 7 even on Sundays, banks and national holidays. While there is no limit on the minimum transfer of money, the maximum amount that can be transferred via IMPS is 200,000.
The best part of IMPS is that it can be achieved in various ways. For example, ATM, net banking, mobile and even SMS. Thus, IMPS is not a far much bigger goal and it can be achieved easily. It is available everywhere. In villages as well as in cities.
IMPS is known for quickness in transactions. Mostly, it is categorized into two different parts. One is IMPS via mobile and the other IMPS via net banking.
IMPS via mobile
IMPS can easily be done via mobile. Mobile is the easiest way to transfer funds from one account to another. It saves time as well as resources because it can be done everywhere. However, to do IMPS through mobile, two things are required
- The 10 digits mobile number that has been registered in the beneficiaries’ bank account. Registration of the receiver’s mobile number in the bank account is compulsory. Only the number can be used that is registered in the name of the bank account.
- The MMID of the beneficiary. The MMID stands for mobile money identifier. It is a unique 7-digits code issued to people who want to join mobile banking. It is unique for everyone. This number is issued by the bank as per the accounts. If the number of accounts is more than one, then MMID will require for each account. However, only one number is enough for all the bank accounts. But the MMID number will be different for a different account.
MMID ensures that the transaction is private and no one can see it. Next, with MMID, it is not necessary to remember the account number and IFSC code. Only, the mobile number and MMID code are enough to do a transaction.
To create an account of IMPS via mobile, the respective mobile banking app is used. It has an option of IMPS that needs to be activated. Once activated after filling out the required forms, mobile banking will be activated. Then, only a mobile number is enough to transact money from the bank account.
IMPS via net banking
IMPS can also be availed with the help of net banking. In this case, the IFSC code and account number is required. It can directly be done through a net banking app. Just log in to the net banking app. Then, go to the fund transfer option. On that page, choose IMPS transfer via IFSC code and bank account number. Fill out the required form and proceed with okay. The payment will easily be transferred from one account to another. It is also an effective method to transfer money from the bank.
A confirmation message will appear both in SMS and email declaring that the transaction has been done successfully.
IMPS via SMS
India is a country of the countryside. Though the use of smartphones is increasing every day many people still don’t have smartphones. In this case, IMPS can also be done without the internet. The only required thing in this transaction is a registered mobile number of an account.
For this, first, apply for net banking and register the Mobile number with the savings or current bank account. Once done, send some text to the fund transfer. The transfer should be according to the format Suggested by the bank to initiate fund transfer. Then, fill up the necessary details and submit. Next, enter the name to validate the number. Once, the mPin is validated, IMPS via SMS, without any internet and smartphone, is ready.
It is helpful for people who don’t know how to use a smartphone or the internet. It is a simple method that enables the customer to transfer money in real-time without using the internet.
Today, the service of IMPS is available in digibank and almost all central banks. Some private banks also offer this service. It is available for most people who have an account in the bank.
What is an NEFT?
NEFT provides a service that provides people with an instant transfer of funds. National Electronic Fund Transfer or NEFT transfers money from one account to the other account in real-time. It is managed by the reserve bank of India. It is spread all over the country and can be availed from anywhere. It is used by individuals, firms and corporate businesses.
It was initiated by the Reserve bank of India to provide a convenient way of transferring money from one account to another account. It is availed by individuals, firms and corporate businesses. To transfer money from the NEFT, either net banking or direct bank can be used to get NEFT.
To transfer money through NEFT, both sender and receiver must have NEFT services. The money will be transferred in half-hourly batches. And, the gateway is managed by the reserve bank of India. The fund can be transferred 24 x 7 and anywhere in India.
NEFT via net banking
NEFT can be done in one way. One method is net banking. To do NEFT via net banking, first, go to the net banking app. Then, go to the transfer fund option. Select the NEFT option. Then, put the bank account details, account holder name, IFSC code of the receiver in the net banking. Click on the send fund option. Put the amount needed to be transferred. Check out the details put in the boxes. Click on the send button. The money will be transferred from one account to another.
How do NEFT works?
The work of NEFT starts when the NEFT code is first generated. Then, the tank generates a message and sends it to the NEFT service centre. NEFT Service centre sends this message to the NEFT clearing centre that is managed by RBI. The NEFT Clearing centre sorts the transactions according to their destination. Then, the money is cut from the sender’s account and sent to the receiver’s account.
After then, a message is sent to the receptive NEFT service centre. The receptive NEFT service centre decides the request according to the bank’s location. Then, the message is sent to the final bank. When the final bank gets the message, it sanctions the money to the receiver's bank account. In this way, the money is transferred from one bank account to other another bank account.
NEFT is directly managed by the Reserve bank of India which ensures the safety of the transaction. It is easy to use and only physical details are required to transact money from one bank account to another bank account via NEFT. However, it is important that both sender and receiver should be registered in NEFT. The details of the NEFT of the receiver should be with the sender.
There is the minimum amount that can be transferred via NEFT. However, the maximum limit of the amount that can be transferred via NEFT is different for a different bank. However, there are no charges for the transfer of money. Make sure to check out all these details before filling up the form.
Difference between IMPS and NEFT in Points
- IMPS transfer money via net banking, mobile and SMS banking. All these options demand different prior knowledge of the receiver. The difference in transactions means the difference in the method of working. However, NEFT works on a single platform. It transfers money only via net banking that can be availed both online and offline via banks.
- IMPS is managed by the National Payment Corporation of India. However, NEFT is managed by the Reserve bank of India.
- There is no limited minimum amount of money. But the maximum amount of money that can be transferred via IMPS is INR 2,00,000. While there is no maximum amount in NEFT. Different banks have their limitation regarding transactions.
- IMPS transfer the money in real-time. It means the money will be transferred within a few seconds. And, the money will be transferred only via online. However, NEFT undergoes different channels and checks. It usually takes nearly 2 hours for the whole transaction. Also, NEFT is available both online and offline. That’s why it allures most people.
- IMPS charges around INR 2.5 to INR 25+ GST depending on the method of transaction is used. It also varies with vary in different banks. They charge differently depending on the facilities provided. However, NEFT doesn’t charge any money for the transfer of money. It is available free of cost.
Conclusion
Both IMPS and NEFT is an excellent methods for the transfer of money. Both are regulated by higher authorities in India. IMPS provides different methods for the transfer of money. A person should consider both choices. They have their merits and demerits. And, a person can choose between them depending on their needs.
References
- https://www.dbs.com/digibank/in/articles/pay/what-is-imps#
- https://www.wishfin.com/banking/neft-full-form/
- https://www.dbs.com/digibank/in/articles/pay/neft-vs-imps
