NEFT (National Electronic Funds Transfer): Definition, Full Form, & How to Make Payments

25 JANUARY, 2024

Imagine being able to move money from your bank to another in an instant. That’s what NEFT, or National Electronic Funds Transfer, allows you to do! In simple terms, think of NEFT as a fast lane for your money, making it easy for you to send and receive money electronically.

In this blog, we’ll break down NEFT for you. We’ll explain what NEFT stands for, what it means for you, and how you can use it to pay your credit card bills. Whether you’re a finance pro or just someone who wants to make handling money easier, keep reading, as this blog will tell you everything you need to know about NEFT.

What is NEFT?

NEFT, which stands for National Electronic Funds Transfer, acts like a digital link that joins banks all over India, allowing money to be transferred quickly and safely.

In simple terms, NEFT can be thought of as an electronic version of sending money via cheque. However, unlike cheques which can take several days to clear, NEFT transfers are usually processed and settled within a few hours. This makes it a faster and more convenient option for making payments.

How Does NEFT Works?

Here’s how it works: If you want to send money using NEFT, you first add the details of the person’s bank account you’re sending money to (known as the ‘beneficiary’) in your own bank account. Once the beneficiary is added and approved, you can start the transfer. You type in how much money you want to send, and the money is electronically moved from your account to the beneficiary’s account.

The great thing about NEFT is that it’s a direct transfer system. This means the money goes straight from your account to the recipient’s account without any stops along the way. It’s a straightforward, efficient, and safe way to send money.

So, whether you’re paying for things, sending money to your family, or doing business transactions, NEFT makes it all easy with just a few clicks. It’s an important part of the banking system, helping millions of people handle their money every day.

Information Required to Transfer Funds through NEFT

Beneficiary's full name as per bank records
Beneficiary's bank account number
IFSC code of the beneficiary's bank branch
Amount to be transferred
Sender's account number from which the transfer will be made
Any remarks or payment notes for record-keeping purposes (optional)

Benefits of using NEFT for fund transfers

Since its establishment, the NEFT fund transfer system has evolved significantly, providing a secure online money transfer solution. It stands out as a swift and dependable method to transfer funds between bank accounts. Below are the advantages of utilizing the NEFT service for money transfers.

Affordable - NEFT transfers are one of the most economical methods available for electronic fund transfers in India. The charges levied by banks range from zero to a small fee, making it an affordable option for individuals and businesses alike.
Safe and secure - All NEFT transactions are processed through secured banking channels, ensuring the safety of your funds and personal information. This makes it a trusted option for transferring money.
No minimum transfer limit - Unlike other fund transfer methods, NEFT does not have any minimum amount requirement. This allows individuals to transfer even small amounts as needed.
Convenient and fast - NEFT transfers are processed in batches, which means that the funds are usually transferred within a few hours. This makes it a fast and convenient option for making payments.

When Can You Use NEFT (Bank NEFT Timings)?

Kotak Bank has designated timings for NEFT transactions to facilitate customer convenience. Transfers can be initiated anytime between 12:30 am to 9:30 pm within your standard limits. For transactions between 9:30 pm to 11:30 pm, the limit extends to Rs. 10,00,000. Please note, transactions are restricted from 11:30 pm to 12:30 am. These predefined time slots enable efficient money management while ensuring operational smoothness.

Transaction Timings	Transaction Limit
12:30 am to 9:30 pm	You continue to enjoy your existing limits
9:30 pm to 11:30 pm	You can now transfer up to Rs. 10,00,000^
11:30 pm to 12:30 am	No transactions can be initiated

How to Make Payments with a Credit Card using NEFT?

Paying your credit card bill using NEFT is easy and straightforward. Here’s a simple guide on how you can do it:

Step 1: Sign in to Your Bank’s Online BankingFirst, sign in to your bank’s online banking portal with your username and password.

Step 2: Add Your Credit Card as a RecipientNext, you need to add your credit card as a recipient. You can usually do this in the ‘Funds Transfer’ or ‘NEFT’ section. You’ll need to put in your 16-digit credit card number instead of the Recipient Account Number and the Name on the Card instead of the Recipient Name.

Step 3: Put in the IFSC CodeYou’ll also need to put in the IFSC code for credit card payments. This is usually a specific code for your credit card provider.

Step 4: Start the NEFT Transfer. Once the credit card has been added as a recipient and approved (which may take some time), you can start the NEFT transfer. Just put in how much you want to pay towards your credit card bill, and confirm the transfer.

And that’s it! Your credit card payment will be made using NEFT. Remember, while you can start a NEFT transfer anytime, the actual time it takes for the money to get to the credit card company might take some time, depending on when the RBI processes the transfer. So, it’s a good idea to make your payment a few days before it’s due to avoid any late fees.

Tips for Smooth NEFT Transactions

1. Double-check the beneficiary details before confirming the transfer.

2. Note down the transaction reference number for future reference.

3. Be aware of any specific NEFT cut-off timings set by your bank.

4. Keep your bank informed about any potential changes in your contact information.

Conclusion

In this blog, we’ve learned a lot about NEFT, which stands for National Electronic Funds Transfer. We now know that NEFT is a system in India that lets you transfer money quickly and safely from one bank account to another.

Plus, paying your credit card bills with NEFT makes things even more convenient.So, to sum up, NEFT is a powerful tool in banking that has changed how we handle money. It shows how technology can simplify our lives and everyday tasks more efficient. So, the next time you need to move money or pay your credit card bill use NEFT.