Earlier, transferring funds from one account to another used to take up a lot of time and effort. There was also quite a bit of time delay because money transfers were not as advanced as they are today. Now, with the introduction of internet banking, it is possible to send and receive money almost instantly.
The internet and smartphones have made it possible for individuals from all walks of life to initiate online transactions. And the number of online money transfers has gone up significantly in recent years.
When it comes to online fund transfers through internet banking, users can choose between multiple options like Immediate Payment Service (IMPS) and Real-Time Gross Settlement (RTGS) according to their needs and requirements.
Wondering what these two fund transfer options are and how they differ from each other? Continue reading to find out about what they are, and learn about the various IMPS charges and RTGS charges applicable for users who wish to utilize these services to send money.
Table of Contents
Everything You Need to Know About IMPS
Immediate Payment Service, also known as IMPS, is an online fund transfer service operated by the National Payments Corporation of India (NPCI). Through the IMPS facility, users can make instant fund transfers to any bank account within India. Here are some key things you should know about IMPS.
For utilizing this service, banks generally tend to levy IMPS charges depending on the amount of money you wish to transfer via the transaction you initiate. These charges will typically vary from one bank to another. But broadly speaking, they are usually between Rs. 1 and Rs. 25 per transaction, excluding GST.
Instant Transfer of Funds
One of the many advantages of the Immediate Payment Service facility is that the fund transfer is effected instantly. There’s absolutely no time delay involved. So, for instance, let’s say that you wish to send Rs. 5,000 from your account to your spouse’s account through IMPS. Now, as soon as you affect the transfer, the amount will be credited to the beneficiary’s bank account instantly.
Another thing you should know about IMPS is that it is available 24/7. This means that you can transfer funds at any time of the day, and on all days including bank holidays.
With this system of fund transfer, there’s a maximum limit up to which you can use this facility. The maximum limit per IMPS transaction is currently Rs. 5 lakhs. If you wish to transfer funds more than Rs. 5 lakhs, you will have to use other forms of payment services like RTGS or NEFT.
Everything You Need to Know About RTGS
Real-Time Gross Settlement, also known as RTGS, is a kind of fund transfer service operated by the Reserve Bank of India (RBI). Here are the main things you should know about RTGS transfers.
Minimum Fund Transfer Limit
Since this service was designed primarily for high-value transactions, there’s a minimum transfer limit of Rs. 2 lakhs. However, unlike IMPS, there’s no maximum transfer limit to RTGS.
Similar to the Immediate Payment Service, RTGS fund transfers are also processed instantly, which means that the funds are usually credited to the beneficiary’s account in real-time.
RTGS fund transfers have been made available 24/7 as well, allowing users to initiate fund transfers to other bank accounts at any time of the day.
As far as RTGS charges are concerned, many banks don’t levy any charge for online transfers. However, it is advisable to get in touch with your bank to get a better idea of whether it levies any charge for RTGS transactions before initiating them.
IMPS vs RTGS
One of the key differences between IMPS and RTGS is the fact that IMPS fund transfers can only be done online, whereas RTGS can be done both online and offline by visiting a bank branch.
In the case of offline transfers, RTGS charges will be applicable on the transfer. These charges are dependent on the bank and the amount of money that you wish to transfer. Usually, it can be anywhere from Rs. 20 to Rs. 50 per transaction, excluding GST.
So, which one of these two payment methods should you choose? If the amount of funds that you wish to transfer is within Rs. 5 lakhs, then IMPS might be the better option since the IMPS charges are lower than that of RTGS. However, if the amount of funds exceeds Rs. 5 lakhs, then you can consider opting for RTGS since the maximum limit of IMPS is only up to Rs. 5 lakhs.