The National Electronic Funds Transfer (NEFT) is a comprehensive nationwide payment system designed for seamless fund transfers between bank accounts. This digital mechanism has gained immense popularity with the advent of online banking, eliminating the necessity of physical visits to a bank.

NEFT Transaction Process

NEFT transactions operate in batch modes rather than real-time. Here's the process:

• Form Completion: Initiators must complete a form specifying details like the beneficiary's name, bank branch, IFSC code, account type, and number.
• Data Accumulation: The origin bank collects and transfers necessary data to the NEFT service center.
• Message Transmission: The NEFT center forwards messages to the clearing center for batch processing.
• Transaction Sorting: Transactions are sorted by recipient bank, preparing entries for fund transfers.
• Funds Dispersal: The receiving bank processes the transaction for account crediting.

NEFT Availability

NEFT services are accessible 24x7, year-round. Previously restricted to specific hours, it's now fully integrated with 'Straight Through Processing' (STP) for after-hours automation.

Online NEFT Transfers

Steps to make an online NEFT transfer:

1. Login: Access your net banking portal.
2. Select Transfer: Choose 'Fund transfer' and then 'NEFT.'
3. Add Beneficiary: Input beneficiary details if not pre-listed, followed by authentication via OTP.
4. Initiate Transfer: Post adding beneficiary, input the transfer amount and confirm.

Offline NEFT Transfers

For offline transfers, visit a bank branch:

• Form Submission: Fill and submit an NEFT form with both payer and payee details.
• PAN Requirement: Required for transactions over Rs. 50,000.

NEFT Services by Banks

Major banks like Axis Bank, HDFC Bank, ICICI Bank, among others provide NEFT services.

Tracking NEFT Transactions

Tracking can be done by:

• Contacting the Customer Facilitation Centre (CFC) using details like the UTR number.
• Finding CFC specifics on the bank’s website.

Eligibility for NEFT

Both account and non-account holders can execute NEFT. Non-account holders can transact up to Rs. 50,000 per transaction, providing necessary details.

NEFT Transfer Limits

While the RBI sets no strict caps, banks may impose their own limits.

NEFT Prerequisites

Key prerequisites for engaging in NEFT:

• Possession of a savings or current account.
• Basic beneficiary information, including branch IFSC.

Potential NEFT Failures

Failures are possible due to technical issues. Refunds usually occur within three days, with customer service available for inquiries.

NEFT Charges

Transfer charges vary:

• Up to Rs. 10,000: Rs. 2.50 (+ GST)
• Rs. 10,000 to Rs. 1 Lakh: Rs. 5 (+ GST)
• Above Rs. 2 Lakh: Rs. 25 (+ GST)

Note: Charges can differ across banks.

Advantages of NEFT

Key benefits include:

• 24/7 availability, secure fund transfers, and no RBI-imposed charges.
• Usable for diverse transactions like credit card payments.
• Cost-effectiveness and ease of use via net and mobile banking.

Comparing NEFT, UPI, and RTGS

Each has distinct characteristics:

• NEFT: Requires beneficiary details, involves time up to 30 minutes, and is available 24/7.
• UPI: Instant transfer, requires no beneficiary addition, and limits up to Rs. 2 lakh.
• RTGS: Suitable for transactions above Rs. 2 lakh with immediate effect.

Overall, NEFT remains a trustworthy and efficient method of electronic fund transfers across India, appreciated for its round-the-clock availability and simplicity.