NEFT Full Form – All You Need To Know about NEFT

The NEFT Full Form in English is National Electronic Funds Transfer (NEFT) is a digital system for transferring funds from one bank account to another. It offers a secure, swift, and convenient method for moving money. In this discussion, we’ll explore how NEFT operates and how you can utilize it for sending or receiving funds.

Key Features and Facts

The NEFT Full Form in English is National Electronic Funds Transfer is a widely used method for financial transactions in India, allowing for online money transfers without the need for cash withdrawals or cheques. Here are some key points to know about NEFT:

Introduction:

Launched by the RBI in 2005, NEFT facilitates electronic transfers between banks.

Operation:

NEFT transactions can be conducted at any time, day or year, as long as both the sending and receiving banks are NEFT-enabled.

Monitoring:

The RBI oversees NEFT operations and ensures the system’s functionality.

Advantages:

NEFT is particularly beneficial for businesses and corporations due to its capacity for large-scale daily transfers.

Methods:

Transactions can be initiated via online banking or by visiting a bank branch and filling out a request form.

Coverage:

NEFT enables money transfers across all national locations.

How NEFT Works

NEFT transactions are processed on a deferred net settlement (DNS) basis rather than in real-time. Transactions are batched and processed at specific intervals throughout the day. Here’s a step-by-step overview:

Initiation:

The sender starts a NEFT transfer by providing the recipient’s details (name, account number, and IFSC code) to their bank.

Submission:

The sender’s bank sends the transaction details to the RBI.

Processing:

The RBI verifies the availability of funds and includes the transaction in the next processing batch.

Settlement:

Transactions are processed in batches by the RBI, and the recipient’s bank is instructed to credit the funds to the recipient’s account.

Completion:

The recipient’s bank receives the notification and credits the beneficiary’s account accordingly.

Eligibility for NEFT Transfers

Any individual or entity with a savings account is eligible to use NEFT for transferring funds. This includes both personal and business accounts, and transactions can be made between accounts in the same bank or different banks. Accuracy in entering transaction details is crucial to avoid errors.

Using NEFT for Credit Card Bill Payments

NEFT is an effective way to pay credit card bills without dealing with cash or cheques. Follow these steps to make a credit card payment via NEFT:

Access:

Log in to your online or mobile banking platform.

Select Option:

Find the NEFT payment or fund transfer option.

Enter Details:

Input the credit card issuer’s account information, which can be found on your credit card statement or obtained from the issuer.

Amount:

Specify the payment amount and select your credit card account as the source of funds.

Confirm:

Review and confirm the transaction details.

Note that NEFT transactions are not processed instantly, so it may take some time for the payment to reflect on your credit card account. Each bank may have slightly different procedures for NEFT payments, so be sure to follow your bank’s specific instructions.

NEFT-Related Terminology and Their Full Forms

NEFT RTGS Full Form

NEFT:

National Electronic Funds Transfer

RTGS:

Real-Time Gross Settlement

NEFT and RTGS are electronic payment systems for transferring funds between bank accounts. NEFT processes transactions in batches at set intervals, while RTGS transfers funds in real-time for amounts of Rs. 2 lakh or more, ensuring immediate settlement without delays. RTGS transactions are executed in real-time, speeding up the fund transfer process.

NEFT UTR Full Form

UTR:

Unique Transaction Reference

The UTR is a unique identifier for each NEFT transaction, allowing tracking and resolution of issues. Typically 16 characters long, it comprises a mix of letters and numbers. Generated by the sender’s bank and included in the RBI’s message, it also appears in the transaction confirmation sent to the sender. To check the status of your NEFT transaction, you can use the UTR through your bank’s online services or by contacting your bank directly.

NEFT IBKL Full Form

IBKL:

The first four characters represent the bank name (IDBI Bank), the fifth character is reserved for future use, and the last six characters (000008) denote the branch code.

NEFT RTGS IMPS Full Form

NEFT:

National Electronic Funds Transfer

RTGS:

Real-Time Gross Settlement

IMPS:

Immediate Mobile Payment Service

These are popular electronic payment methods in India. In addition to these, India offers other online payment methods such as e-wallets and UPI.

NEFT KKBK Full Form

KKBK:

Refers to NEFT services by Kotak Mahindra Bank. For credit card payments, the Kotak Credit Card IFSC number is KKBK0000958, where “KKBK” indicates the bank and “0” is a reserved character.

NEFT Transaction Service Fees

NEFT transactions incur service fees based on the amount transferred:

• Up to Rs. 10,000: Rs. 2.50 + GST
• More than Rs. 10,000 up to Rs. 1,00,000: Rs. 5.00 + GST
• More than Rs. 1,00,000 up to Rs. 2,00,000: Rs. 15.00 + GST
• Over Rs. 2,00,000: Rs. 25.00 + GST

Benefits and Features of NEFT

NEFT offers a convenient, secure, and cost-effective way to transfer funds:

Convenience:

Transfer funds from home or office without visiting a bank.

Speed:

Transactions are typically processed within hours, though this can vary.

Wide Availability:

Most banks in India support NEFT, allowing transfers to any bank account.

Security:

Utilizes secure systems to protect funds during transfer.

Low Cost:

Generally less expensive than alternatives like demand drafts or telegraphic transfers.

Reduced Risk:

Eliminates physical instrument handling, reducing risks such as damage, theft, or forgery.

Limitations of NEFT Transactions

While NEFT (National Electronic Funds Transfer) is a reliable method for domestic money transfers, it does come with certain limitations that may make it less suitable for some transactions. Here are the key drawbacks:

Processing Time:

NEFT transactions are not instantaneous and can take several hours to complete.

Availability:

NEFT is not operational 24/7; it only functions during specific hours on working days.

Transaction Limits:

There is a cap on the transfer amount, with a maximum limit of INR 10,00,000 (approximately $13,500) per transaction.

Currency Restrictions:

NEFT can only be used for transferring Indian Rupees (INR) and does not support foreign currency transactions.

Transaction Fees:

Each NEFT transaction incurs a fee, which varies depending on the amount transferred and the bank’s policies.

Urgency:

NEFT may not be suitable for urgent or time-sensitive transactions. For faster transfers, consider using IMPS (Immediate Payment Service) instead.

NEFT Transaction Failures

Common reasons for NEFT transaction failures include:

Incorrect Account Details:

Errors in providing bank account information.

Account Status Issues:

Problems such as account closure or freezing.

If a transaction fails, the funds are typically returned to the sender’s account within two hours. In cases where cash was used for the transfer, the money will be held in the bank’s “Suspense Account.” To retrieve the funds, the sender may need to submit a written request with the bank’s acknowledgment of the NEFT request.

We hope this overview of NEFT and its limitations has been helpful. For more information and insights, download the Testbook App now.

NEFT Transfer Charges and Fees

Amount Being Transferred	Charges
Up to ₹10,000	₹2.5 + GST
Above ₹10,000 to less than ₹1 lakh	₹5 + GST
Above ₹1 lakh to less than ₹2 lakhs	₹15 + GST
Above ₹2 lakhs	₹25 + GST

• Note: There are no charges for NEFT transfers initiated via online or mobile banking. The beneficiary does not incur any fees.

Benefits of Using NEFT for Fund Transfers

Since its inception, NEFT (National Electronic Funds Transfer) has evolved to become a secure and efficient method for online money transfers. Here are some key benefits of using NEFT:

Cost-Effective:

NEFT offers low transaction fees, with some banks like IDFC FIRST Bank providing NEFT transfers free of charge.

Secure:

Regulated and monitored by the RBI, NEFT ensures a secure online transfer environment.

Speed:

NEFT eliminates the need for cheques and demand drafts, providing a faster alternative for transferring funds.

Notifications:

You receive SMS alerts and email updates for every transaction.

Availability:

NEFT operates round-the-clock, including public and bank holidays, for added convenience.
Versatility: It supports both high-value and small transactions, offering flexibility for all types of users.

Who Can Use NEFT?

NEFT is accessible to anyone with a bank account. This includes individuals, small and medium businesses, and corporate entities. Funds can be transferred between accounts within the same bank or to different banks. To use NEFT for online transfers, simply log into your bank account, select NEFT as your transfer method, and provide the beneficiary’s account details and transfer amount. NEFT streamlines the process, allowing you to bypass lengthy procedures and paper checks.

Details Required for NEFT Fund Transfer

When initiating an NEFT transfer, you need to provide the following details:

• Beneficiary’s bank account name
• Beneficiary’s bank account number and type
• IFSC code
• Bank name and branch

Net banking and mobile apps often allow you to save beneficiary details for recurring payments, making future transactions quicker and more convenient.

Still Having Trouble Completing Vendor Payments?

If you’re using Zoho Books, you can easily handle B2B payments directly from your account as soon as you receive a vendor bill. Just enter the transfer amount, the recipient’s name, and account number, then select NEFT, RTGS, or IMPS as your preferred transaction method and click Send. It’s that simple! You can also track the status of your transaction—whether it’s processed or still in progress—right after initiating the transfer.

Incorporating various online fund transfer methods into your accounting system can streamline your payment process even further. With Zoho Books, you can manage B2B payments directly from your accounting software, ensuring prompt payment processing. Plus, you can offer these convenient payment options to your customers to receive payments faster. Try our free accounting software today to gain better control over your cash flow.

Frequently Asked Questions

What does NEFT Full Form?

The NEFT Full Form in English is National Electronic Funds Transfer. It is an electronic payment system that facilitates the transfer of funds from one bank account to another within India.

How does NEFT work?

NEFT processes transactions in batches rather than in real time. Transactions are collected throughout the day and processed at set intervals, with funds being credited to the recipient’s account after processing.

What are the operational hours for NEFT transactions?

NEFT transactions can be initiated 24/7, but they are processed during specific working hours. Typically, NEFT operates from 8:00 am to 6:30 pm on weekdays and 8:00 am to 12:30 pm on Saturdays. Transactions initiated outside these hours are processed in the next available batch.

Are there any fees associated with NEFT transactions?

Yes, NEFT transactions may incur fees that vary depending on the amount transferred. For example, transactions up to ₹10,000 may be charged ₹2.5 plus GST, while transactions above ₹2 lakhs may be charged ₹25 plus GST. Fees may differ between banks.

Can I use NEFT for international transactions?

No, NEFT can only be used for domestic transactions within India. It is designed for transferring Indian Rupees (INR) between bank accounts located in India. For international transfers, other methods such as wire transfers or remittance services should be used.

conclusion

The NEFT Full Form in English is National Electronic Funds Transfer is a crucial component of India’s electronic payment landscape, providing a secure and efficient way to transfer funds between bank accounts within the country. With its batch-based processing system, NEFT offers a reliable method for both individuals and businesses to handle transactions, whether for personal payments or large-scale corporate transfers.

Although NEFT transactions are not processed instantaneously and are subject to specific operational hours and transaction fees, it remains a versatile and widely used tool for managing domestic payments. Its integration into online and mobile banking platforms further enhances its accessibility and convenience.