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Money Transfer Services

Home Money Transfer Money Transfer Services
Updated: 23-02-2024 10:22:07 AM

Before internet changed the way people bank, anyone who wanted to transfer money to someone’s account needed to visit the bank or a third-party service provider to avail wire transfer services. The wire transfer transactions were not carried out as regularly as they are these days and the charges were high. Most people refrained from opting for a wire transfer because of the high transaction charges. Everything changed when the internet took over and made it easy for the banks to offer money transfer services.

Bank account holders can now use their mobile phones or computers to carry out funds transfer easily. Especially for money transfer within the country, they only need to log into their net banking or mobile banking accounts and transfer the money. They do not need to visit the bank and can complete the transaction from anywhere since they do not need to be present in a specific location. If they have access to the internet, they can complete the transaction irrespective of their location.

The level of convenience has ensured that money transfer is now carried out freely. And, the transaction charges have also lowered considerably since the banks also want to encourage more of their customers to avail net banking and mobile banking services.

Here are a few of the most popular money transfer services customers can use these days:

  • Wire Transfer
  • Net Banking and Mobile Banking
    • NEFT
    • RTGS
    • IMPS
  • E-wallets

Also Read: Money Transfer and Money Conversion Process

Money Transfer Services

Money Transfer Services

There are a plenty of money transfer services available to bank customers these days. They have been briefly discussed here:

Wire Transfer: Customers can send money by availing the wire transfer facilities offered by banks as well as third-party vendors offering the facility. It is not essential to transfer funds using a bank account since the customers can hand over the amount to be transferred in cash. If you compare wire transfer to online bank transfer facility, it is not as fast and cost-effective as other options available these days. Most people only prefer to go for the wire transfer facility when they need to send money overseas. The high transaction charges levied on wire transfers make this a least favourable option for many people.

Net Banking: Most banks have their own websites these days and offer online banking services. Customers only need to register for the net banking service once and then use their net banking credentials to operate their bank account electronically. They can check their account balance, transfer money, pay bills, make loan repayments, etc. There are no charges to register for net banking services. However, the charges for money transfer may vary depending on the service they use.

Through net banking and mobile banking, banks provide the money transfer services mentioned here:

  • National Electronic Funds Transfer (NEFT): Most banks in India provide this service to their account holders that are registered for net banking or mobile banking. The customers can log in to the bank’s desktop website, mobile website or mobile app to initiate a funds transfer transaction. NEFT transactions are carried out in batches during the business hours by the bank. The maximum limit for NEFT transactions is Rs. 2 lakh. If the customer initiates a NEFT transaction on a weekend, bank holiday, or after business hours, it is completed i.e. the funds are transferred on the next business day when the bank opens. The customer might have to pay up to Rs. 25 for NEFT transaction based on the transaction amount.
  • Real-Time Gross Settlement (RTGS): This money transfer facility is similar to NEFT and is provided by most banks in India. RTGS transactions are carried out by the bank as soon as they receive the instructions. The minimum and maximum limits for RTGS transaction is Rs. 2 lakh and Rs. 10 lakh respectively. These money transfer transactions are carried out during the business hours of the bank only. Even if the customer initiates the transaction when the bank is not open, the transaction is completed during the business hours of the bank. When the bank receives the instructions for money transfer, it instantly debits the amount from the sender’s account and credits the money to the receivers account. Customers availing the RTGS money transfer facility might have to pay up to Rs. 50 for each successful transaction.
  • Immediate Payment Service (IMPS): When the customers do not want to wait for the bank to open to transfer money online, they can use the Immediate Payment Service. Over 53 Indian banks provide IMPS facility. Customers can carry out IMPS transactions on weekends, other bank holidays, and even after business hours of the bank from their mobile phones. It is one of the most convenient options to transfer small amounts of money. Currently, people can carry out IMPS transactions with a cumulative total of Rs. 2 lakh per day. However, some banks such as SBI only allow customers to carry out IMPS transactions with a cumulative total of Rs. 40,000 after the business hours of the bank and on bank holidays. For IMPS transactions, a customer may have to pay up to Rs. 15 per transaction.

Banks charge a fee when the customers carry out a NEFT, RTGS, or IMPS transaction based on the transaction amount and type of transaction. The transaction charges have been listed here:

Transaction Amount Transaction Charges (Excluding GST)
 NEFT RTGS IMPS
Up to Rs. 10,000 Rs. 2.50 NA Rs. 2.50
Rs. 10,000 – Rs. 1 lakh Rs. 5 NA Rs. 5
Rs. 1 lakh – Rs. 2 lakh Rs. 15 NA Rs. 15
Above Rs. 2 lakh Rs. 25 NA NA
Rs. 2 lakh – Rs. 5 lakh NA Rs. 25 NA
Rs. 5 lakh – Rs. 10 lakh NA Rs. 50 NA

UPI-enabled Apps: Unified Payments Interface (UPI) has enabled smart phone owners to transfer money using a unique UPI Id without the need to remember or share their account details. The customers only need to register for UPI using their bank’s website or mobile app if it offers the UPI service. The bank will issue a unique UPI Id mapped to their bank account that they can use to send or receive money. The UPI id looks like an email id. This is a safe and secure way to carry out online banking transactions since the sensitive information is never revealed to anyone. A customer with a UPI Id can send money to a receiver that does not have a UPI Id by using Account number + IFS Code, MMID or Aadhaar Number. Currently, UPI facility is free of cost which makes it the best option out of the rest of the money transfer services.

e-Wallet: Digital wallets gained popularity post the demonetisation drive carried out in late 2016. People can download a digital wallet, also known as an e-wallet, of their choice on their mobile phone and then add balance from their bank account using the net banking or mobile banking service. Customers can have a maximum of Rs. 20,000 balance in their wallets and carry out transactions worth Rs. 2,000 at a time. For small payments and transfers from one e-wallet to another e-wallet or bank account, e-wallets can work really well. There are small transaction charges and bank fees levied on these transactions based on the e-wallet that you use.

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