NEFT (National Electronic Fund Transfer) is one of the most acceptable modes of making payments from one source to another. Although the transfer of payment is not done instantly, still it does not take as much time as is taken in the clearance of a cheque, which normally takes 2 to 3 days for the money to get transferred from one account to another.
You also have to pay minimal service charges for NEFT transactions. In fact, for making inward transactions at destination bank branches, no service charges are levied. Therefore, if you are not in a hurry, then it is one of the best ways to transfer money.
Here are 7 things which you must know about the NEFT payment system:
What is NEFT?
NEFT stands for National Electronic Funds Transfer, which is a country-wide payment system facilitating the transfer of funds on a one-to-one basis. Through NEFT, an individual or a company can electronically transfer funds from any bank to any individual or company having an account with any other bank in the country.
Who can transfer funds using NEFT?
Individuals, firms or corporates maintaining accounts with a bank branch can transfer funds using NEFT thereon. Even individuals, who do not have a bank account, can deposit cash at the NEFT-enabled bank branches providing instructions to transfer funds using NEFT. However, such transfer of payments is restricted to an upper capping of Rs 50,000 per transaction. This means you cannot transfer money beyond this limit. Any customer doing so have to furnish full details, which include his complete address, telephone number, etc.
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What are the service charges for NEFT transactions?
The charges that are levied on the customer for NEFT transactions are:
1. Inward transactions at destination bank branches (for credit to beneficiary accounts)
– Free, no charges to be levied on beneficiaries
2. Outward transactions at originating bank branches – charges applicable for the remitter
– For transactions up to Rs 10,000 : not exceeding Rs 2.50 (+ Service Tax)
– For transactions above Rs 10,000 up to Rs 1 lakh: not exceeding Rs 5 (+ Service Tax)
– For transactions above Rs 1 lakh and up to Rs 2 lakh: not exceeding Rs 15 (+ Service Tax)
– For transactions above Rs 2 lakhs: not exceeding Rs 25 (+ Service Tax)
Are there any other transactions that could be initiated using NEFT?
Besides personal funds transfer, the NEFT system can also be used for a variety of transactions, which include
Payment of credit card dues to the card-issuing banks,
Payment of loan EMI, etc.
You need to quote the IFSC of the beneficiary card issuing bank to initiate the bill payment transaction using NEFT. Mentioning the IFSC is mandatory for everyone.
When can an individual expect to get the credit to his bank account?
You can expect to get the credit for the NEFT transactions within two business hours from the batch in which the transaction was settled. Currently, from Monday to Friday, NEFT business hours starts from morning 8 am to evening 7 pm and on Saturdays from morning 8 am to afternoon 1 pm. NEFT operates in hourly batches where there are twelve settlements from 8 am to 7 pm from Monday to Friday and six settlements from 8 am to 1 pm on Saturdays.
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What is the limit on the amount that could be transferred using NEFT?
There is no limit – either minimum or maximum – on the amount of funds that could be transferred using NEFT. However, there is a maximum amount capping per transaction limited to Rs 50000 for cash-based transfer within India and also for making the transfer to Nepal under the Indo-Nepal Remittance Facility Scheme.
Can anyone transfer funds from/to NRE and NRO accounts through NEFT?
The NEFT system is enabled for making such transfer of payments. It can be used to transfer funds from or to NRE and NRO accounts in the country which is, however, subject to the adherence of certain provisions of the Foreign Exchange Management Act, 2000 and Wire Transfer Guidelines.