Difference between RTGS code and IFSC Code

NEFT and RTGS are the two most important electronic payment settlement mechanisms in India. It is necessary for all individuals to have a clear understanding about the difference between RTGS code and IFSC code. Knowing this difference is also important for those individuals who need to perform online bank transactions on a regular basis. However, before understanding this difference, it is important for individuals to know what are NEFT, IFSC and RTGS. RTGS and NEFT are the two important online transaction systems for one to one transactions. NEFT stands for National Electronic Fund Transfer, and RTGS stands for Real Time Gross Settlement. Proper details of both these settlement systems have been provided below: 1. RTGS or Real Time Gross Settlement India’s Central Bank or The Reserve Bank of India maintains the RTGS payment network. RTGS is a fund transfer system where the transfer of cash is carried out from one bank to the other bank on a gross and on real time basis. RTGS is the fastest money transfer mechanism by way of the banking network. The meaning of settlement in real time is that the payment transaction is not subject to any waiting period. Transactions get settled within seconds of being processed. The meaning of gross settlement is that settlements get settled on one to one basis without any bunching with the other transactions. Because money transfer takes place within the records of The Reserve Bank of India, payments are taken as irrevocable and final. 2. NEFT or National Electronic Fund Transfer NEFT is a nation-wide system facilitating firms, corporate and individuals to transfer funds electronically from one bank branch to any corporate, firm or individual possessing an account with any other bank branch in any part of the country. Here, it is important to note that the IFSC or Indian Financial System Code is needed for performing transactions by making use of RTGS and NEFT. The IFSC code carries out the task of identifying a specific branch of a certain bank and can easily be found on the website of The Reserve Bank of India. Thus, it is important to understand that the RTGS code does not exist. It is the IFSC that is used for NEFT, IMPS and RTGS. The IFSC or Indian Financial System Code can also be obtained by visiting the bank branch. It is always essential to confirm this code before making any transactions.Check and find correct IFSC Code: https://www.paisabazaar.com/ifsc-code/ 3. How is NEFT Different from RTGS? NEFT is a kind of electronic fund transfer mechanism operating on DNS or Deferred Net Settlement basis which carries out the settlement of truncations in batches. DNS is where the settlement takes place while taking all transactions obtained until the specific cut-off time into account. Such transactions are duly netted as receivables or payables in NEFT. However, these transactions are settled individually in RTGS. The NEFT works in hourly batches, and there are twelve settlements made from 8 am to 7 pm on the week days, and a total of six settlements from 8 am to 1 pm on Saturdays. The transactions initiated post the designated time of settlement need to wait till the next designated time of the settlement. However, this is not the case with RTGS transactions that get processed on immediate basis throughout the business hours of the RTGS. 4. Are NEFT and IFSC Codes same? It is important for individuals to have a clear understanding of the fact that NEFT code is the other name for IFSC because it is also used for NEFT payment applications. This is a unique code which is extremely important for carrying out bank transactions. This code is printed on cheque books and can easily be found online by searching the code of the bank branch. So, there is nothing to get confused about NEFT and IFSC as both are same. This alpha-numeric code comes with different components where the first four characters indicate the bank code, the fifth character is a “0”, and it is used in the form of control character while the rest six characters signify the specific bank branch.Read more: http://www.differencebetween.info/difference-between-ifsc-code-and-neft-code