NEFT transfers India: All you need to know

Wise
17.07.19
4 minute read

If you are familiar with doing bank transfers in India, there is a high chance you’ve heard about the Reserve Bank of India’s NEFT transfers. This is a nationwide electronic payment system for one-to-one money transfers for individuals, firms, and corporations.

There are many advantages to using NEFT to transfer money in India. It erases the long and tedious mode of sending a cheque or demand draft to a beneficiary. And it saves your beneficiary time by not having to visit the bank to deposit the cheque. A digital payment like NEFT is also much faster and trackable and won’t have a chance to get lost or be stolen. Plus both sender and receiver get notified in real time of the transaction going through.

This article will take a deep dive into NEFT transfers and how they work. We will also take a look at the recent changes in rulings in regards to fees for NEFT transfers. We’ll also look at when NEFT transfers are best, and what is another option in case you need to send money to India.

List of contents

What is the full-form of NEFT

The full form of NEFT stands for National Electronic Funds Transfer. It was set up by the Reserve Bank of India (RBI) to provide an easier way to transfer money from one bank to another. It works by providing transfers electronically through a system of timed batches throughout the day during operating hours. In these batches, your transaction amount is debited from your account and credited to your recipient’s account within a few hours. It has greatly shortened the amount of time needed to transfer money.

What are NEFT transfers?

It is a pan-India service that allows for electronic transfers from any Indian bank account to any individual, firm or corporation that has an account in a participating NEFT bank branch and vice versa. There aren’t any geographic restrictions or restrictions of centers in India for NEFTs as it can be done online, as long as your bank is NEFT-enabled. Almost all major commercial banks do provide NEFTs but you can check with the Reserve Bank of India website to see if your local branch has it available.

NEFT transfers are only allowed for bank accounts and transfers in India, and can not be used for transfers abroad (except for Nepal, which has a specific remittance facility). So if you are looking to transfer money into an Indian account from abroad, you will need to look for another service.

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Are you living abroad but need a low cost and easy service to transfer money to India? Look no further than Wise. With over 5 million customers, and over 4 billion euros worth of transactions transferred every month, Wise is a trusted partner for your India transfer needs. You can deposit money from abroad directly into a bank account in India, and 90% of transfers to India are completed within 24 hours of payment. And rather than profiting off of your transfers like a bank, Wise uses smart technology to make sure you only have to pay a low one time fee for your transaction.

How to do NEFT transfer?

With an NEFT transfer, you can transfer money electronically through your bank’s online banking, your bank’s app or in person at the bank branch. Even if you don’t have a bank account, you can walk into an NEFT-enabled bank branch and make a transfer with cash to another NEFT enabled account.

Before you start, you will need to get your beneficiary details like:

  • Beneficiary name
  • Account number
  • Account type
  • Name on the account
  • IFSC code of the beneficiary bank branch
  • Email or mobile information

The IFSC, or Indian Financial System Code, is a unique bank branch identifier. It is an 11 digit alphanumeric code specific to the exact bank and branch. You can find the IFSC code on your account’s cheques or by using our IFSC code finder.

The easiest way to go about starting an NEFT transfer is through your bank’s net banking facility or app.

  • You can typically find it under the ‘Fund Transfer’ or ‘Third Party Transfer’ tab, and NEFT transfers should be listed to get started.
  • If you are sending money to a new person, you will need to add them as a beneficiary first and then enter their details
  • Then, you will be asked to enter the amount and a quick description of what the transfer is for, as well as how you want communication to be done on the transfer
  • If you are doing it in person, you will need to fill out the application with the same information at the bank branch, and include your contact information
  • In both cases, you will have to sign off to authorize your bank branch to debit your account and send the specified amount to the beneficiary
  • Once the transfer is successful, you and your beneficiary will get an SMS or email confirming the transaction

For NRIs, you can use NEFT to transfer money from your Indian accounts to your NRE/ NRO accounts in the country. This specific type of transfer will have to adhere to the rules of the Foreign Exchange Management Act, 2000 (FEMA) and Wire Transfer Guidelines.

As of July 1, 2019, the Reserve Bank of India has made NEFT charges free. Their decision to waive all charges and fees to banks is part of an effort to move more Indians to digital banking across the country. So no charges should be levied on your NEFT transfer.²

NEFT charges

As of July 1, 2019, the Reserve Bank of India has made NEFT charges free. Their decision to waive all charges and fees to banks is part of an effort to move more Indians to digital banking across the country. So no charges should be levied on your NEFT transfer.²

NEFT timings

The money transfer requests are settled in batches every 30 minutes between 8 am and 7 pm on all working days except the 2nd and 4th Saturdays of the month. Once the settlement goes through, your beneficiary can expect to get credited in their account typically within 2 business hours.

NEFT limit

One of the most attractive aspects of the NEFT service is that there is no minimum or maximum on how much you can transfer using NEFT online. However, if you are doing a cash-based remittance at a bank branch you will be capped at ₹ 50,000 per transaction.

Let Wise take care of your international payments

NEFT is convenient for transfers within India, but what about a great option to send money to India? Try Wise. Wise gives you the exchange rate you see on Google or Reuters for all your transfers. With no minimum or maximum, you can send as little or as much as you need with one low time fee and the clearest exchange rate there is. And just like an NEFT transfer, the transfers deposit right into the Indian bank account. So if you need to make a transfer or payment to someone in India, you can do that from the comfort of your own home abroad with Wise.

Sources used for this article

  1. Reserve Bank of India- FAQs
  2. Waiver of Charges

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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