When studying abroad, managing finances efficiently is crucial. Students often need to transfer funds from India for tuition fees, accommodation, or daily expenses. Two of the most common methods for transferring money within India before sending it abroad are IMPS (Immediate Payment Service) and NEFT (National Electronic Funds Transfer).
This blog will explore the difference between IMPS and NEFT and how international students can use them effectively before transferring money overseas.
Table of contents
Why Do International Students Need IMPS or NEFT?
Before sending money abroad, students often need to transfer funds between their Indian bank accounts, from parents to students, or to forex services. Understanding which transfer method suits them best can help reduce costs and ensure timely payments.
Reasons for using IMPS or NEFT for Money Transfers:
- Paying education loan EMIs from one Indian bank to another.
- Transferring money to a forex service provider for currency exchange.
- Sending money from parents’ accounts to their own student accounts.
- Paying credit card or utility bills before moving abroad.
- Depositing funds into a bank that offers better forex rates for international transfers.
What is IMPS?
The full form of IMPS is Immediate Payment Service. It is a real-time electronic funds transfer system that allows individuals to send and receive money instantly, 24/7, including on weekends and holidays.
IMPS is primarily used for urgent transactions where immediate fund credit is required, making it a convenient option for students who need to transfer money quickly before converting it into foreign currency or paying last-minute expenses.
How IMPS Works?
- Funds are transferred instantly from one bank account to another.
- It requires either the recipient’s account number and IFSC code or Mobile Money Identifier (MMID) and mobile number.
- Accessible through internet banking, mobile banking apps, and ATMs.
- Unlike NEFT, which processes payments in batches, IMPS ensures immediate settlement of transactions.
IMPS Limit and Charges
- Maximum limit: Varies by bank, but generally up to ₹5 lakh per transaction.
- Transaction charges: Usually between ₹2 and ₹25, depending on the amount.
- Is IMPS free? Online IMPS transfers may have minimal charges, depending on the bank.
Common Uses of IMPS for Students
- Urgent transfers between student and parent accounts.
- Depositing money quickly to a forex service provider for international transfers.
- Paying university-related expenses like accommodation or exam fees.
- Transferring money to friends for shared expenses.
Features of IMPS for Students
- Instant fund transfer, useful for last-minute payments.
- Available 24/7, including weekends and holidays.
- Accessible via mobile banking, internet banking, and ATMs.
- Can be used to transfer money to forex dealers for currency exchange.
- Requires account number + IFSC or MMID (Mobile Money Identifier).
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What is NEFT?
The full form of NEFT is National Electronic Funds Transfer. It is a secure, RBI-regulated system for transferring money electronically between banks in India.
Unlike IMPS, which processes transactions instantly, NEFT works in batches every 30 minutes, meaning transfers may take up to a few hours depending on the bank’s processing time.
How NEFT Works?
- Transactions are settled in half-hourly batches instead of real-time transfers like IMPS.
- Requires recipient’s account number and IFSC code for processing.
- Available 24/7, including weekends and bank holidays.
- No minimum transaction limit, making it suitable for both small and large fund transfers.
NEFT Limits and Charges
- Maximum limit: No upper limit, but individual banks may impose restrictions.
- Can I transfer ₹20 lakh through NEFT? Yes, NEFT allows high-value transactions, unlike IMPS.
- NEFT vs. RTGS: NEFT works in batches for all amounts, while RTGS (Real-Time Gross Settlement) is meant for instant settlement of ₹2 lakh and above.
- Best option for ₹2 lakh transfer? NEFT is preferred over IMPS due to lower charges on high-value transactions.
Common Uses of NEFT for Students
- Transferring large sums for education loan repayments.
- Paying tuition fees or university expenses in advance.
- Depositing money into forex services before making international transfers.
- Making bulk payments, such as rent or semester fees.
Features of NEFT for Students
- Best for high-value transactions like tuition fee payments and loan repayments.
- Lower charges than IMPS for large transfers.
- Can be used to send money to international remittance services.
- Requires IFSC code and account number for processing.
- Processed in half-hourly batches, not instantly.
IMPS vs NEFT
When transferring money within India before sending it abroad, students often choose between IMPS (Immediate Payment Service) and NEFT (National Electronic Funds Transfer). The major difference between IMPS and NEFT lies in their speed and processing method—IMPS offers instant, 24/7 transfers, while NEFT processes transactions in batches every 30 minutes.
| Feature | IMPS | NEFT |
| Speed | Instant | Processed in batches (every 30 minutes) |
| Availability | 24/7, including bank holidays | 24/7, but batch processing applies |
| Best For | Urgent small transactions | Large transactions with lower fees |
| Use Case for Students | Sending money to forex services quickly | Paying education loan EMIs, tuition fees |
| Transaction Mode | Internet banking, mobile banking, ATMs | Internet banking, mobile banking |
| Charges | Higher for high-value transfers | Generally lower |
Key Takeaways
- IMPS is ideal for students who need money instantly, such as transferring funds to a forex dealer at the best exchange rate.
- NEFT is better for planned expenses like tuition fee payments or repaying education loans due to lower charges.
- If sending money to an international transfer service, use NEFT to reduce transaction fees.
Please note: Money transfers are not just limited to IMPS and NEFT. You can compare the differences between NEFT, IMPS, and RTGS in detail here.
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IMPS and NEFT are easy and convenient methods for students to transfer money domestically before sending it abroad. IMPS allows instant fund transfers using mobile banking, internet banking, or ATMs, making it ideal for urgent transactions.
NEFT, on the other hand, processes payments in half-hourly batches and is best suited for planned transfers, such as tuition fee payments or education loan repayments.
Both methods require the recipient’s bank account details and IFSC code for secure transactions. Check out the steps to use IMPS and NEFT for money transfers-
Steps to Transfer Money via IMPS
- Log in to your bank’s mobile or internet banking.
- Select IMPS Transfer.
- Enter beneficiary details (account number and IFSC or MMID and mobile number).
- Enter the amount and confirm the transaction.
- Funds are credited instantly, which is helpful for time-sensitive forex transactions.
Steps to Transfer Money via NEFT
- Log in to your bank’s online banking.
- Select NEFT Transfer.
- Add beneficiary details (account number and IFSC code).
- Enter the amount and initiate the transfer.
- Funds are credited in the next available batch, making it useful for scheduled payments.
Charges for IMPS and NEFT
Understanding the charges for IMPS and NEFT is essential for students managing their finances efficiently.
IMPS transactions typically incur small fees depending on the transfer amount, while NEFT charges are often lower and may even be free for online transfers via internet banking.
The cost factor makes NEFT more suitable for high-value transfers such as tuition fees and education loan repayments, whereas IMPS is preferred for quick, urgent transactions despite slightly higher charges.
Here is a comparison table highlighting the transaction charges for IMPS and NEFT based on the transaction amount:
| Transaction Amount | IMPS Charges | NEFT Charges |
| Up to INR 1,000 | INR 2.50 to INR 5 per transaction (varies by bank) | INR 1 to INR 2.50 per transaction (varies by bank) |
| INR 1,001 to INR 10,000 | INR 5 per transaction (varies by bank) | INR 2.50 to INR 5 per transaction (varies by bank) |
| INR 10,001 to INR 1 lakh | INR 5 to INR 10 per transaction (varies by bank) | INR 5 to INR 10 per transaction (varies by bank) |
| INR 1 lakh to INR 5 lakhs | INR 10 to INR 15 per transaction (varies by bank) | INR 10 to INR 15 per transaction (varies by bank) |
| INR 5 lakhs and above | Not applicable for IMPS (max limit is INR 5 lakhs) | INR 15 to INR 25 per transaction (varies by bank) |
Notes:
- IMPS Charges: Vary by bank and transaction amount. Maximum transaction limit is ₹5 lakhs.
- NEFT Charges: Generally lower for smaller transactions and can vary by bank. No specific maximum transaction limit.
- Transaction Speed: IMPS is typically faster and available 24/7, while NEFT operates in batches during banking hours.
To sum up, for international students, IMPS is best for urgent, small-value transfers, while NEFT is ideal for large, planned transactions like tuition payments or education loan repayments.
If transferring money to a forex provider before sending it abroad, using NEFT can help save on transaction fees. Check out the FAQs for more details.
FAQs
No, IMPS is only for domestic transfers. However, it can be used to send money to a forex provider for international transactions.
NEFT is usually cheaper for high-value transactions, making it better for tuition fee payments and education loan repayments.
Yes, IMPS is available 24/7, including weekends and bank holidays. The transfer is processed instantly.
Google Pay uses UPI for transactions, but underlying bank transfers may be processed through IMPS or NEFT.
Yes, if using the account number method; not needed if transferring via MMID.
No, it is a banking service available through various platforms like mobile banking apps, internet banking, and ATMs.
Yes, NEFT is a good option for paying EMIs on time.
IMPS is faster, but NEFT is cheaper for large amounts, making it preferable for forex transactions.
NEFT transactions are processed in batches every 30 minutes.
Most banks allow IMPS transfers up to INR 5 lakh for individuals.
No, you must use an international money transfer service for that.
Yes, RBI has removed charges for online NEFT transactions done via internet banking.
Yes, IMPS can be used via mobile banking, ATMs, or even through bank branches.
To learn more about bank accounts for students, the best education loans, forex, banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.
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