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What are the advantages and disadvantages of NEFT

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What are the advantages and disadvantages of NEFT

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In this day and age when digital banking is the norm, it is important to know the advantages and disadvantages of NEFT — or National Electronic Funds Transfer. One of the most preferred ways to transfer funds from one bank account to another, NEFT is a highly beneficial feature that banks in India offer today. 

What are the advantages of NEFT?

Round-the-clock availability 

NEFT is available 24 hours a day, 7 days a week. This means you can transfer funds at short notice even on public holidays and on weekends. This feature makes it highly convenient for anyone who needs funds for an emergency requirement.

Cost-effective funds transfer

Many banks offer the NEFT facility free of charge. The banks that do levy a charge also do so at nominal rates. This makes NEFT one of the most cost-effective ways to transfer money.

What are the disadvantages of NEFT?

NEFT transfers are typically done in batches. So, when you initiate a funds transfer through NEFT, the money is not transferred to the recipient instantly. This makes NEFT an unsuitable choice if you are keen on transferring funds to the recipient right away. Although the transfer will be made within a few hours, it can be inconvenient in case of an emergency. Here’s where RTGS or Real Time Gross Settlement can be useful instead. 

NEFT vs RTGS: How do they compare?

RTGS is a system of fund transfer where money is transferred to the recipient’s account immediately. Here is a closer look at how NEFT and RTGS differ from one another. 


National Electronic Funds Transfer (NEFT)

Real Time Gross Settlement( RTGS)

Minimum transaction limits


₹2 lakhs

Maximum transaction limits

No limit

No limit

Nature of settlement 

Funds transferred in batches

Funds transferred immediate since settlement occurs on a one-on-one basis

Time taken for the transfer of funds 

Around 1.5 to 2 hours


Transfer timings

24 x 7

Set timings depending on the bank

Charges for transfer

No charges levied by the RBI

Depends on the amount being transferred 


Irrespective of the channel you choose, remember to enter the beneficiary details correctly and completely. This will greatly minimize the chances of NEFT or funds transfer failure. 

If you have to pay smaller amounts instantly, UPI can be a great platform. The Fi.Money app allows you to Pay, Save, and Invest all under one roof! You can also analyse your spends here to see which transfer effects you the most. 

Frequently Asked Questions

1. What are the reasons for NEFT failure?

It is only rarely that a NEFT transaction fails. In the few instances that this happens, the reasons could be any of the following causes:

  • Providing incorrect or wrong account number details for the recipient
  • Entering the wrong IFSC code

2. What are the disadvantages of RTGS?

Although the RTGS facility has many benefits, there are some minor drawbacks as well. For instance, you cannot track the transaction till it is executed. Also, the minimum sum that needs to be transferred via RTGS is ₹2 lakhs, making this channel unsuitable for smaller fund transfers. 

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