Electronic payment modes

With the increasing popularity of Internet banking the various electronic payment modes are gaining huge popularity. The most popular modes are

1.RTGS
2.NEFT
3.ECS

RTGS - Real Time Gross Settlement

As the name indicates we can transfer funds in the real time. This is the most speediest mode of funds transfer currently available. However, the system is meant mainly for high-value transactions.

The minimum amount prescribed is 1 lakh. You have to pay small charge for this service.

For fund transfers between 1 lakh and 5 lakh, the fee is 25 per transaction. A transaction above 5 lakh will carry a fee of 50.

NEFT - National Electronic Funds Transfer

Under this system, the fund transfer takes place at designated time slots — six times a day during weekdays between 9 am and 5 pm, and thrice a day between 9 am and 12 pm on Saturdays.

Transactions up to 1 lakh will entail a fee of 5, while those exceeding 1 lakh will attract 25. Certain banks may charge even slightly more charges.

To transfer money through NEFT, we need certain details like
1)The beneficiary’s name
2)location of his/her bank branch,
3)IFSC code of the branch,
4)Account type
5)Account number.

ECS - Electronic Clearing Service

This is meant for payments of recurring nature such as Systematic Investment Plans (SIPs) in a mutual fund , Electricity bills, Telephone bills, EMI payments etc.

Here we need to inform our service provider, say, our Mutual Fund House, by submitting a form to confirm our willingness to make payment through ECS along with the application form for a new Folio number. This need to be done only once for a typical Fund house.

After that we can use of the Folio number to start / redeem SIPs using PIN numbers provide by Fund House and make full use of ECS. What’s more, most banks will execute our ECS instructions usually FREE of any service charges.