NEFT (National Electronic Funds Transfer)

NEFT stands for National Electronic Funds Transfer.

It is an electronic fund transfer system in India that allows bank customers to transfer money from one bank account to another on a one-to-one basis. NEFT is managed by the RBI and operated by the National Payments Corporation of India (NPCI). What is NEFT? Unlike IMPS which is instant, NEFT processes transactions in batches. There are 23 settlement cycles every working day — one every half hour from 8:00 AM to 7:00 PM on weekdays, and fewer cycles on Saturdays. If you initiate a NEFT transfer at 3:00 PM, the beneficiary typically receives the funds by 3:30 PM in the same settlement cycle. On holidays and Sundays, NEFT settlements do not take place, though you can initiate a transfer that will be processed in the next available batch. NEFT has no minimum or maximum transaction limits, though individual banks may impose their own ceilings. Most banks do not charge for NEFT transfers if done through internet banking or mobile apps. For transactions done at bank branches, nominal charges may apply — typically ₹2.5 to ₹25 per transaction depending on the amount. To initiate a NEFT transfer, you need the beneficiary's bank account number, bank name, IFSC code, and account type (savings or current). The sending bank adds the transaction to the NEFT batch, and the RBI's Indian Financial Technology and Allied Services (IFTAS) routes it to the destination bank. NEFT is widely used for salary credits, vendor payments, and regular bill payments. For example, an employer in Mumbai sending salary to an employee's account in a cooperative bank in Pune via NEFT is common. The system settles net positions between banks at the end of each half-hour cycle. One key advantage of NEFT over cash or cheque is the digital paper trail it provides. Each NEFT transaction generates a unique reference number that can be used to track the status of the transfer. Unlike a cheque that can bounce, NEFT transfers are guaranteed by the participating banks once accepted into the system.