NEFT stands for National Electronic Funds Transfer, which is an electronic funds transfer system maintained by the Reserve Bank of India (RBI) . It was started in November 2005 and enables bank customers in India to transfer funds between any two NEFT-enabled bank accounts on a one-to-one basis via electronic messages. NEFT is a one-to-one payment facility, and transactions can be processed only between banks that offer NEFT-enabled services. NEFT transactions do not occur in real-time basis, unlike real-time gross settlement. Previously, NEFT system settled fund transfers in hourly batches with 23 settlements occurring between 00:30 hrs. to 00:00 hrs. However, the RBI reduced clearance times to half-hourly batches in April 2016, and in August 2019, the RBI announced that it would enable round-the-clock settlements from 16 December 2019.

To initiate an NEFT transfer, the customer fills up an application form providing details of the beneficiary (like name, bank, branch name, IFSC, account type, and account number) and the amount to be remitted. The remitter authorizes his/her bank branch to debit his account and remit the specified amount to the beneficiary. This facility is also available through online banking, and some banks also offer the NEFT facility through ATMs. NEFT transactions are completely safe and secure, and the receiver and sender of the funds get notified instantly upon completion of the transaction. NEFT does not require cheques or demand drafts while transferring money, hence it is economical. Any account holder, whether an individual, firm, or corporate, can carry out NEFT transactions. The only required condition is that the banks of both the parties must be NEFT-enabled. Apart from transferring money, you can also use NEFT to pay your loan installments, credit card dues, EMIs, etc. .

The structure of charges for NEFT transactions is as follows: Inward transactions at destination bank branches (for credit to beneficiary accounts) are free, and no charges are to be levied on them. For outward transactions at originating bank branches, the charges are as follows:

• Up to Rs. 10,000: Not exceeding Rs. 2.50 (+ Applicable GST)
• From Rs. 10,001 to Rs. 1 lakh: Not exceeding Rs. 5 (+ Applicable GST)
• From Rs. 1,00,001 to Rs. 2 lakhs: Not exceeding Rs. 15 (+ Applicable GST)
• From Rs. 2,00,001 to Rs. 5 lakhs: Not exceeding Rs. 25 (+ Applicable GST)
• From Rs. 5,00,001 to Rs. 10 lakhs: Not exceeding Rs. 25 (+ Applicable GST)
• Above Rs. 10 lakhs: Not exceeding Rs. 50 (+ Applicable GST)