If you’re a business owner in India who has started implementing digital transactions, your knowledge shouldn’t be limited to cash and card payments. If you’ve heard about net banking methods like NEFT, IMPS, and RTGS, you already know that they are used to transfer funds from one account to another. Have you ever wondered if there is more to learn about these money transfer methods?

Knowing the details of each would help you figure out the best one for your everyday business requirements. This blog post will help you understand the three methods and how each one can help you.

NEFT, RTGS, and IMPS

NEFT stands for National Electronic Funds Transfer and allows one-to-one fund transfers between two account holders. This method does not allow real-time transfer of funds but at the same time does not have restrictions on the maximum amount of funds that can be transferred in a single day.

RTGS, Real-Time Gross Settlement, allows business owners to transfer large amounts instantly. One advantage that RTGS has over the other methods is the transaction speed, since the entire amount is transferred in real time.

While the Reserve Bank of India brought in NEFT and RTGS, IMPS (Immediate Payment Service) was brought in by the National Payments Corporation of India (NPCI). IMPS is another real-time payment service, but the distinguishing factor is that IMPS is available around the clock and you can use the service even on bank holidays. Using IMPS, you can transfer comparatively lower amounts, up to Rs. 2 lakhs, instantly.

You can think of IMPS as the fund transfer mode that has the best features of both RTGS and NEFT. You can transfer minimum amounts at any time with instant results. Though IMPS services are mostly used online, a few banks offer SMS services. Check with your bank to see if they support IMPS transfers via SMS.

IMPS allows customers to transfer funds through both banks and Prepaid Payment Instrument (PPI) issuers. PPIs are instruments that allow you to purchase goods and services or initiate fund transfers using the value stored in the PPI. Some examples of PPIs include smart cards, magnetic stripe cards, digital wallets, and vouchers. Individuals without bank accounts can transfer funds by IMPS using PPI.

Differences between NEFT, RTGS, and IMPS

How to do NEFT transfers

• Log in to your internet banking account.
• Navigate to the Fund Transfer tab.
• Click on NEFT from the drop-down menu.
• Choose the beneficiary from the list of registered beneficiaries.
• Once you select the debit account, enter the amount and mention remarks if you have any.
• Verify all the information, and if everything is correct, click Confirm and complete the process.
• Use an OTP to authenticate the transaction.
• Click Submit.

How to do RTGS transfers

• First log in to your internet banking or mobile app.
• Navigate to the funds transfer or payments section.
• Now, choose RTGS as the transfer method.
• Fill in the beneficiary's information and bank's IFSC code.
• Fill in the amount to be transferred.
• Check the details and once confirmed authenticate the transaction using an OTP and submit.

How to do IMPS transfers

• Enter your PIN in your bank's ATM.
• Navigate to Fund Transfer or Other Services.
• Choose IMPS Fund Transfer.
• Fill in the payee’s mobile number, MMID, and the amount.
• Check and confirm the transaction.
• Select the right debit account and complete the transfer.

If you are looking to do an IMPS transfer via mobile banking, here are the steps you need to follow.

• Log in to your mobile banking app.
• Navigate to Fund Transfer and select IMPS transfer.
• Choose the beneficiary's MMID or account number and add the amount.
• Authenticate with your MPIN or transaction password.

To do an IMPS transfer from your net banking account:

• Log in to your bank's net banking.
• Go to the IMPS option.
• Enter the receiver's account number, IFSC code, and name.
• Authorize the transaction to complete it.

Advantages and benefits of online money transfer services

Online fund transfers are reliable, fast, and convenient. Using these services, you can transfer funds easily without having to wait in long queues to withdraw cash or try to be physically present at the bank. They also offer choice and flexibility—if you consider factors like the value of funds you want to transfer, transaction speed, cost, and timing, you can select the service that suits your needs best for each transaction.

Still having trouble completing vendor payments?

If you’re using Zoho Books, you can carry out B2B payments from your Zoho Books account as soon as you receive a bill from your vendor. All you have to do is enter the amount to be transferred, the recipient’s name, and the account number. Then choose NEFT, RTGS, or IMPS as the preferred transaction type and click Send. You can even track the status of your transaction (processed or in progress) once you’ve initiated the transfer.

Having an accounting system that incorporates the different online fund transfer modes will simplify your payment process even more. With Zoho Books, you can carry out B2B payments right from your accounting software as soon as you receive a bill from your vendor. You can also offer these convenient payment options to your customers and get paid quicker. Try our free accounting software today to manage your cash flow with greater awareness.