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Advantages and disadvantages of NEFT

NEFT stands for National Electronics Fund Transfer. It is used to transfer money from one account to another through net banking. It saves time by not going to the bank to proceed. NEFT is simple, it is paperless, and there is no need for a checkbook or demand draft to transfer the money. The main drawback of NEFT transactions is that they are not ideal for urgent transactions, are not available 24/7, and have a transaction limit.  So here this article gives information about the advantages and disadvantages of NEFT to better understand this topic.

Pros or Advantages of NEFT:

Here are some of the Benefits of NEFT transaction

  1. NEFT has round-the-clock availability on all days of the year.
  2. There are no charges to saving bank account customers for online NEFT transactions.
  3. No levy of charges by RBI from banks.
  4. Penal interest provision for the delay in credit or return of a transaction.
  5. A positive confirmation of credit to the beneficiary account was sent to the remitter via SMS or email.
  6. Near-real-time funds transfer to the beneficiary account and settle securely.
  7. On all days of the year, we are available 24 hours a day, 7 days a week.
  8. The beneficiary does not have to visit the bank to deposit the cheque or demand a draft to receive the payment.
  9. It is a safe and secure payment method in which both parties can be assured of security without any worry of loss or theft of the physical instruments.
  10. NEFT transactions are completed in batches throughout the day. It provides reasonably fast fund transfers compared to older procedures such as checks.
  11. The national electronic fund transfer method of initiating a transaction is cost-effective and individuals can initiate or receive it directly at the convenience of their home or workplace through Internet banking
  12. This electronic transfer is cost-effective.
  13. This method is used for effective transfer as well as settlement of funds and mobile banking.
  14. Recently, the Bank of India has widely accepted this method of money transfer.

Cons or Disadvantages of NEFT:

Here are some of the drawbacks of NEFT transaction

  1. Despite the bank taking proper steps to ensure the security of NEFT transactions,. Using an unsecured one makes your information prone to being hacked or passed onto a hacker.
  2. It can only be used for domestic transfers.
  3. NEFT transactions can be complex, and funds are not transferred instantly to the recipient.
  4. NEFT is a highly technical alternative to transferring funds, which might not be easy for everyone to operate. A person with little computer knowledge might find it difficult to operate and access this method.
  5. Some banks may charge additional fees for NEFT transactions, especially if they involve a larger amount.
  6. If you need to make an urgent payment, NEFT may not be the ideal option because it does not provide the real-time settlement capabilities that systems such as RTGS offer.
  7. NEFT is not available 24/7. It only runs during established hours on business days. Therefore, transfers cannot be made at any time of the day or on holidays.
  8. NEFT transactions are highly technical, so they cannot be used by everyone.
  9. NEFT transactions are not processed in real-time. They are done in batches, so there may be a delay in funds reaching the receiver, especially if stated after the cutoff time for a particular batch.


The national electronic fund transfer (NEFT), in its complete form, transformed money transfers in India. In conclusion, taking into account the benefits and drawbacks of NEFT, it can be concluded that this is an affordable, feasible, and low-cost means of fund transfer that is universally recognized by banks across the country. To make sure that the money is credited to the appropriate person, it is necessary to supply the beneficiary with accurate bank account information. Considering some drawbacks like time constraints and non-real-time efficiency, NEFT is still a widely used option for domestic transactions since it offers a reliable and efficient method of payment.

Thank you for reading this article. If you have any queries regarding our article on the advantages and disadvantages of NEFT, then do have a comment in the comment section below.

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