Understanding NEFT Payment: Transactions and Service Charges Explained

Illustrations by Drishya Subramaniam

NEFT payment transaction and service charges

Online banking and NEFT (National Electronic Funds Transfer) have revolutionized the way money transfers are conducted, offering numerous benefits and making transactions much more convenient. Online banking provides individuals with the ability to access and manage their bank accounts anytime, anywhere, eliminating the need for physical visits to banks and paperwork. NEFT enables quick and secure electronic fund transfers, allowing funds to be moved swiftly between accounts. These advancements in technology have made money transfer easier than ever, providing convenience, accessibility, speed, and cost-effectiveness. With features like 24/7 availability, secure transactions, and simplified international transfers, online banking and NEFT have become essential tools in managing personal finances and facilitating seamless financial transactions.

What is NEFT payment?

NEFT is an electronic payment system that facilitates interbank fund transfers in India. It allows individuals, firms, and corporate entities to transfer funds from one bank account to another using electronic means. NEFT operates on a deferred net settlement basis, where transactions are settled in batches at scheduled intervals throughout the day.

NEFT was introduced in India in November 2005 by the Reserve Bank of India (RBI). Initially, NEFT operated in half-hourly batches on weekdays from 8:00 AM to 6:30 PM and on Saturdays from 8:00 AM to 12:30 PM. However, to enhance customer convenience, the RBI implemented 24x7 availability of NEFT from December 2019, allowing fund transfers to be initiated and settled round the clock, including weekends and holidays.

What are the benefits and features of NEFT transaction?

The NEFT system offers several benefits to individuals and businesses for their financial transactions:

Batch Processing: NEFT operates on a batch processing system, where fund transfer requests are accumulated and settled in batches at scheduled intervals throughout the day. This allows for efficient processing and settlement of multiple transactions at once.

Convenience: NEFT provides a convenient mode of transferring funds electronically without the need for physical visits to banks. It can be accessed through online banking platforms, making it accessible from anywhere with an internet connection.

Wide Coverage: NEFT is available across all major banks in India, ensuring widespread coverage and compatibility for fund transfers between different bank accounts. Below is the list of major banks providing NEFT facility.

List of banks allowing NEFT transaction

Cost-Effectiveness: NEFT transactions are generally cost-effective compared to other modes of fund transfer, such as demand drafts or wire transfers. Banks typically charge nominal fees for NEFT transactions, making it an economical option.

Time Efficiency: While NEFT operates in batches, with settlements occurring at scheduled intervals throughout the day, the funds are generally transferred within a few hours. This makes NEFT a relatively quick method of transferring funds.

Secure Transactions: NEFT transactions are highly secure, as they are facilitated through encrypted channels and require authentication, such as internet banking login credentials or OTP (One-Time Password) verification.

Transparency and Tracking: NEFT transactions provide clear records and transaction receipts, enabling easy tracking and reconciliation of funds. This feature is especially useful for businesses and individuals who need to maintain detailed financial records.

  • By getting in touch with their respective bank’s NEFT Customer Facilitation Centre, the sender and the beneficiary can find out the status of the NEFT transaction.
  • Customers can get information about each bank’s NEFT CFC on the website of their particular bank.
  • If the customer wishes to monitor the transaction quickly, they must give the bank some information about the transaction, such as the Unique Transaction Reference (UTR) number or transaction reference number, the date of the transaction, etc.

Availability of 24x7 Transactions: Since December 2019, NEFT operates round the clock, including weekends and holidays. This allows individuals and businesses to initiate fund transfers at any time, providing greater flexibility and convenience.
International Transfers: NEFT can also be used for remitting funds abroad in certain cases, subject to adherence to the foreign exchange regulations and guidelines set by the RBI.

The benefits of NEFT transactions include convenience, cost-effectiveness, time efficiency, security, transparency, and extended availability, making it a reliable and popular mode of fund transfer in India.

These features collectively make NEFT a popular and reliable method for electronic fund transfers in India, serving the needs of individuals and businesses alike

How to carry out a NEFT transaction?

To carry out a NEFT transaction in India, you can follow these steps:

  • Ensure you have a bank account: You should have a bank account with a participating bank that offers NEFT services. Most major banks in India provide NEFT facilities to their customers.
  • Access the banking channel: Choose a convenient mode to access your bank account. This can be through internet banking, mobile banking, or by visiting the bank branch in person.
  • Provide beneficiary details: Collect the necessary details of the beneficiary to whom you want to transfer funds. These details typically include the beneficiary’s name, bank account number, bank branch name and IFSC code (Indian Financial System Code). The IFSC code is required to identify the specific bank branch for the beneficiary.
  • Initiate the NEFT transaction: Using the chosen banking channel, navigate to the funds transfer section and select NEFT as the mode of transfer.
  • Fill in the required information: Enter the beneficiary details, including the account number, IFSC code, and the amount you wish to transfer. Double-check the details to ensure accuracy.
  • Authorization and authentication: For security purposes, you may need to provide authentication, such as internet banking login credentials, transaction passwords, or OTP (One-Time Password) verification. Follow the instructions provided by your bank to complete this step.
  • Confirm and submit: Review the transaction details, including the beneficiary information and the amount to be transferred. If everything is accurate, confirm the transaction and submit it for processing.
  • Transaction acknowledgement: After submitting the NEFT transaction, you will receive an acknowledgement or reference number. Note down this number for future reference and transaction tracking.
  • Settlement and processing: The NEFT transaction will be processed in the next available batch based on the scheduled settlement timings of your bank. The funds will be transferred to the beneficiary’s account accordingly.
  • Track and verify: You can track the status of your NEFT transaction using the acknowledgement or reference number provided by your bank. This allows you to verify if the funds have been successfully transferred to the beneficiary’s account.

It’s important to note that specific steps and interfaces may vary slightly depending on the bank and the mode of banking you choose (online, mobile, or in-person). However, the basic process of providing beneficiary details, authorizing the transaction, and submitting it for processing remains consistent across banks.

What are the timings acceptable to make an NEFT transaction?

The NEFT service is available every day of the year, around-the-clock, 365 days a year. Every 30 minutes throughout the day, it is done in batches. The likelihood is that if you request a transaction at 09:02 am, it will be processed by 09:30 am.

What are the charges applicable on NEFT transaction?

The charges applicable on NEFT transactions vary across banks and can depend on several factors such as the transaction amount, customer category (individual or corporate), and the mode of initiation (online or offline). Here are some general points to consider regarding NEFT service charges:

  • RBI’s Waiver: The Reserve Bank of India (RBI) has mandated that banks cannot charge customers for inward NEFT transactions received into their accounts. This means that if you receive funds via NEFT, you should not incur any charges.
  • Outward Transaction Charges: Banks may levy charges for initiating outward NEFT transactions. These charges can vary based on the transaction amount and the type of customer (individual or corporate).
  • Slab-based Charges: Some banks follow a slab-based charging structure, where the charges are determined based on different transaction amount ranges. For example, the charges may be lower for transactions up to a certain amount and increase as the transaction amount increases.
  • Flat Charges: Other banks may apply a flat charge for NEFT transactions, regardless of the transaction amount. The flat charges can vary from bank to bank.
  • Online Transactions: Banks often offer lower charges or even waive them entirely for NEFT transactions initiated through online banking channels or mobile banking apps. This is to encourage digital transactions and provide cost benefits to customers.
  • Revised Charges: It’s worth noting that the RBI periodically reviews and revises the charges applicable to NEFT transactions. Banks are required to comply with these guidelines and inform their customers about any changes in charges.

To know the specific charges applicable to NEFT transactions, it is recommended to check with your bank or refer to their official website or customer service for the most up-to-date information. Banks usually provide details of their charges and fees in their published tariff schedule or fee disclosure document.


In conclusion, NEFT (National Electronic Funds Transfer) has emerged as a reliable and convenient electronic payment system in India. It provides individuals and businesses with a seamless and secure method to transfer funds between bank accounts. NEFT offers benefits such as convenience, wide coverage, cost-effectiveness, and transparency. With the availability of 24x7 transactions and the ease of initiating transfers through online banking channels, NEFT has become an integral part of the digital banking ecosystem. It continues to play a crucial role in enabling quick and efficient money transfers, contributing to the growth of India’s digital economy.


1. How long does it take to transfer money through NEFT?
The time taken to transfer money through NEFT (National Electronic Funds Transfer) can vary, but typically, NEFT transactions are settled within a few hours. The funds are generally credited to the recipient’s account on the same day or the next working day, depending on the cut-off times and batch processing schedules of the respective banks.

2. What happens if NEFT is done but not received?
If a NEFT transaction is done but not received by the intended recipient, the first step is to verify the transaction details, including the beneficiary’s account number and IFSC code. If the details are correct, you should contact your bank and provide them with the transaction reference number. The bank will investigate the issue and take appropriate actions to resolve it, which may involve reversing the transaction or crediting the funds to the recipient’s account.

3. Are NEFT transactions secure?
Yes, NEFT transactions are considered secure. They are processed through encrypted channels and require authentication measures like internet banking login credentials or OTP verification.

4. Can NEFT transactions be cancelled or reversed?
NEFT transactions cannot be cancelled or reversed by the sender once they are successfully initiated. If a reversal is required, it can only be done by the beneficiary’s bank based on their investigation and resolution process.

5. What is the maximum amount that can be transferred through NEFT?
There is no upper limit for NEFT transactions. However, individual banks may set their own maximum transaction limits based on their policies and customer category