IMPS vs NEFT in Banking: Difference Between IMPS and NEFT Fund Transfer

With the need for banking service digitization becoming imminent, we’ve seen many digital payment services come to life, including NEFT and IMPS. These two services are fast becoming some of the best available to customers. Although they provide digital payment services, these transfer options have many discrepancies.

Both IMPS and NEFT are used widely across India and form the backbone of many digital transactions. This reflects the broader evolution of digital payment in India.

What Is National Electronic Funds Transfer (NEFT)?

National Electronic Funds Transfer (NEFT) is one payment service that enables funds transfer between participating banks and institutions. It was created by the Reserve Bank of India and is operated by the same agency. In addition, it has PAN India coverage.

With NEFT, the requests are typically settled within a half-hour through the netting. The service is available 24/7, meaning that users can transfer money any time of the day. Also, users without bank accounts can use the service and do so offline. The only issue with this payment system is that it is not immediate. It takes some time for the money to go from one account to another.

What Is Immediate Payment Service (IMPS)?

IMPS or Immediate Payment Service is an electronic funds transfer system for interbank transactions and a key enabler of A2A payment in India. The service is immediate, and it is available across multiple platforms such as ATMs, SMS, the Internet, Mobile, and others. Users can also transfer funds using the Prepaid Payment Instrument (PPI) issuers under IMPS.

Difference Between IMPS and NEFT

The differences between NEFT and IMPS can be outlined in four areas, which we have highlighted below.

Service Availability

IMPS is available across multiple platforms, including internet banking, mobile apps, ATMs, SMS, and USSD services - ensuring flexible access for users. In contrast, NEFT is primarily accessible through internet and mobile banking or by visiting a bank branch, with no support for SMS or USSD channels - making IMPS more versatile, especially for users without constant internet access.

NEFT vs IMPS: Which Is Better for You?

All money transfer services have some particular needs and requirements of each customer and their beneficiaries. The best payment service for you depends on what you are looking for and the purpose of the transaction. For example, if you are responsible for the monetary welfare of your folks residing in another city, and you want to send them money monthly. You can decide to use both IMPS and NEFT.

So, if your parents want money instantly, it is better that you use IMPS funds transfer since it offers a more immediate transaction time. The payment method utilizes an instant transfer facility. However, if you don’t need it to be an immediate transfer, you can go with NEFT. The reason is that you would not have to bear the transaction fees that come with using IMPS.

Aside from that, if you are looking to make offline transactions that you do not want to pay an extra fee, you should certainly go with NEFT. It is available for both online and offline transactions. All in all, whatever payment service you want to use is based on your preference because they both offer good services and they will get the job done for you.