Transferring money between bank accounts has become much easier and faster in India due to many payment and settlement methods. Many banks, private companies, and government organizations are gradually implementing multiple payment and settlement methods such as NEFT, RTGS, and IMPS. As a result, various entities, customers, and other parties involved have spent significantly less time and effort. These new-age money transfer methods are quick, effortless, and offer easy access to paperwork.
Although it is simple to make payments online, which method should you choose? Every payment method comes with a different feature. Prefer the payment mode depending on the transaction value, transfer speed, and other internal factors. For now, let us look at Real-Time Gross Settlement (RTGS)
The Reserve Bank of India introduced Real-Time Gross Settlement (RTGS) in 2004. It is a system that transfers funds continuously in real-time. In this context, 'real-time' means that the instructions get processed immediately after receiving funds without delay. Similarly, handling funds transfer instructions one by one is the gross settlement.
This method of money transfer is intended primarily for high-value transactions. The Reserve Bank of India has waived fees for RTGS transactions solely to increase their popularity among citizens. The central bank has asked commercial banks to provide benefits to customers. In India, approximately 1,40,000 bank branches are RTGS-enabled.
The followings are the features and benefits of RTGS funds transfer:
1. It is a secure method of transferring funds.
2. There is no upper limit for RTGS transfers made through a bank branch.
3. You can transfer real-time funds to the beneficiary account.
4. You can transfer funds at any time.
5. There is no need for a physical cheque or demand draft to perform a transaction.
6. There is no risk of physical instrument loss/theft or fraudulent encashment for beneficiaries.
7. You can use internet banking to initiate transactions from your home or workplace.
8. There are no fees or charges for transferring funds.
9. RTGS transactions are legally protected.
When starting an RTGS transfer, you must provide the following information:
1. Funds forwarding account information.
2. Benefactor bank and branch information.
3. Name of the customer who will benefit.
4. Account number of the beneficiary.
5. The amount you are going to transfer.
6. Include if there are any notes or comments.
7. The receiving bank's IFSC code
There are two ways to carry out RTGS transactions:
Many banks allow you to add beneficiaries online through internet banking. After successfully adding recipients, you can transfer money to them. Individuals and corporate account holders can use online banking to make RTGS transactions.
To initiate a fund transfer, go to your nearest bank branch and fill out the RTGS form.
The transaction durations for RTGS transfers have been updated a few times. Customers can conduct RTGS transfers from 7 a.m. to 6 p.m. However, according to the update on August 26, 2019, you can only perform interbank transactions between 7 a.m. and 7:45 p.m.
The minimum amount you can transfer through RGS is Rs.2 lakh. And there is no affiliated cap when you transact through a bank branch at the maximum bound. Instead, there may be a limit if you transfer through internet banking. It is usually Rs 25 lakh, but this varies between banks.
You do not get charged if you perform the transaction online via internet banking, but you may incur charges when transacted via a bank branch (the costs may vary from one bank to another).
The following are the steps to add recipients to an RTGS transaction:
1. Use your consumer ID and password to access your bank's net banking website.
2. Navigate to the 'Funds Transfer' section.
3. Select the 'Add Beneficiary' button.
4. Enter the beneficiary's account information, which includes the account number, IFSC, bank name, and branch name.
5. Select 'Add' and then verify your action.
6. You may have to validate the addition by entering your credentials.
7. Once the beneficiary gets added, you will receive a confirmation message.
After adding a benefactor, you can begin transferring funds by following the steps below:
1. Navigate to your bank's internet banking page and select the 'Funds Transfer' tab.
2. Choose the account number of the beneficiary.
3. Enter the desired transfer amount.
4. Check the box indicating that you accept the terms and conditions.
5. Examine the data and click the confirm button to finish the process.
Yes, the recent update by the Reserve Bank of India changed how RTGS works. From then, you can perform RTGS transactions any time you want.
Yes, payment options like RTGS are ideal for high-value transactions and speed up the process. And again, it entirely depends on the bank. So, ensure to contact the bank manager if it is an emergency to transfer a very high amount. However, there can be a delay of 30 minutes at maximum.
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