NEFT Full Form: In today’s digital world, electronic funds transfer (EFT) systems have become the backbone of financial transactions. Among these systems, NEFT is one of the most widely used and reliable methods for transferring money between banks in India.
National Electronic Funds Transfer (NEFT Full Form) is one of the fastest modes of money transfer from one individual or business to another. The transaction can be initiated through online mode by using net banking or mobile banking services. For more information on NEFT full form and to understand the transaction process and charges you can continue reading further.
Table of contents
What is the Full Form of NEFT?
The NEFT full form is National Electronic Funds Transfer. It is an electronic payment system that allows individuals and businesses to transfer funds from one bank account to another across India. NEFT was launched by the Reserve Bank of India (RBI) in November 2005 with the purpose of providing a simple, efficient, and secure way to transfer money without the need for physical checks or cash.
National Electronic Funds Transfer (NEFT) is a specific type of Electronic Funds Transfer (EFT Full Form). Almost all the banks in India provide NEFT facilities to individuals who hold an account with the bank.
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How Does National Electronic Funds Transfer Work?
The National Electronic Funds Transfer (NEFT Full Form) system operates on a deferred net settlement basis, which means transactions are processed in batches. To understand the process of NEFT in detail, check the points below:
- Initiation: The sender initiates the fund transfer by logging into their bank’s online banking platform or through a mobile banking app. They need to provide details such as the beneficiary’s name, bank account number, branch IFSC code and the amount to be transferred.
- Batch Processing: Unlike real-time systems like RTGS (Real Time Gross Settlement), NEFT processes transactions in batches. These batches are processed at intervals throughout the day. The RBI has specified half-hourly settlement batches so that transactions are completed quickly without fail.
- Settlement: Once the transaction is allocated in a batch, it is sent to the RBI, which acts as the central clearinghouse. The RBI then forwards the transaction to the beneficiary’s bank for credit to the beneficiary’s account.
- Credit to Beneficiary: The beneficiary’s bank credits the amount to the beneficiary’s account and informs the sender’s bank about the successful completion of the transaction.
NEFT Transaction Process
The NEFT transaction process is very simple and easy to do. You just need to login to the net banking or the mobile banking app of your bank and follow the instructions. After filling in the necessary details, you just need to wait for a few hours (if the amount is above a certain limit) and then you can transfer the money. Check the process in detail below:
- Log in to Your Online Banking Account through your bank’s online banking portal or mobile app.
- Add the details of the person or entity to whom you want to transfer money. This includes the beneficiary’s name, account number, bank branch, and IFSC code.
- Enter the amount you wish to transfer and any other required details. Confirm the transaction and authorise it using your banking credentials.
- You will receive a confirmation message from your bank once the transaction is completed.
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NEFT Transaction Charges
NEFT (National Electronic Funds Transfer) transactions are usually cost-effective, with nominal charges imposed by banks for transferring funds. These charges vary based on the amount being transferred and the bank’s policy but are generally minimal compared to other money transfer methods. Many banks offer NEFT transactions free of charge for online transfers, making it an affordable and convenient option for both individuals and businesses. To check the charges for NEFT transactions, see the table below:
| Transaction Type | Effective Charges |
| For transactions up to INR 10,000 | INR 2.50 (GST Applicable) |
| For transactions above INR 10,000 up to INR 1 lakh | INR 5.00 (GST Applicable) |
| For transactions above INR 1 lakh and up to INR 2 lakhs: | INR 15.00 (GST Applicable) |
| For transactions above INR 2 lakhs | INR 25.00 (GST Applicable) |
NOTE: These charges are subject to change as per the RBI Guidelines and the internal policy of the banks involved.
By understanding and utilising NEFT, you can make sure that your financial transactions are smooth, secure, and efficient. So, the next time you need to transfer money, consider using NEFT and experience the convenience it offers. Check some of the FAQs on NEFT below:
FAQs on NEFT Full Form
NEFT stands for National Electronic Funds Transfer. It is an electronic payment system established by the Reserve Bank of India (RBI) that facilitates the transfer of funds between banks in India.
The NEFT transaction process involves several steps. The sender logs into their bank’s online or mobile banking platform, provides the necessary beneficiary details (such as name, account number, branch IFSC code, and amount), and authorises the transaction.
NEFT transactions are generally cost-effective, with charges varying based on the amount transferred. For transactions up to INR 10,000, the charge is INR 2.50 plus GST. For amounts above INR 10,000 up to INR 1 lakh, the charge is INR 5.00 plus GST. Transactions above INR 1 lakh and up to INR 2 lakh incur a fee of INR 15.00 plus GST, and for amounts above INR 2 lakh, the charge is INR 25.00 plus GST.
NEFT transactions are processed in half-hourly batches throughout the day. Initially, NEFT transactions were processed during banking hours, but since December 2019, NEFT is available 24×7, 365 days a year, including holidays.
NEFT offers several benefits, including the convenience of transferring funds from anywhere using online or mobile banking, speed of transaction processing, wide accessibility across a vast network of banks in India, cost-effectiveness with minimal charges, etc.
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