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What are the Advantages and Disadvantages of NEFT

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January 30, 2023


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In this day and age when online-first 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. Let's take a look at the advantages and disadvantages of an electronic funds transfer method - NEFT.

What are the Advantages of NEFT?

1. 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.

2. 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?

  • Funds are not transferred instantly to the recipient.
  • Some banks may charge additional fees.
  • NEFT can only be used for domestic transfers.
  • NEFT transactions can be complex and may not be accessible to everyone.

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. 


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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