Internet banking and NEFT are the terms related to the transaction of money. These are the most important services that are provided to the people by the advancing banking sector.
Internet Banking vs NEFT
The main difference between Internet banking and NEFT is that Internet banking is very effective for the customers as they do not need to go to the bank for numerous banking activities and only after few simple clicks the job is done while just sitting at the comfort of home whereas NEFT provides the faculty to such people who do not have a bank account can also deposit their cash at the NEFT-enabled departments with instructions to transport funds using NEFT.
Internet Banking is the faculty to operate financial transactions through a safe and secure website whereas NEFT is an electronic fund transfer system in which transactions are resolved in assortments during certain timings.
Internet Banking allows the user to perform monetary transactions via the internet. It is moreover understood as online banking or web banking. Through this, one can do the basic transfer of money i.e. the individual can transfer funds between accounts and compensate bills effortlessly at any time per their comfort.
NEFT or National Electronic Funds Transfer is upheld by the Reserve Bank of India and was launched in November 2005. It is a network through which funds are transferred electronically. The format was organized and upheld by the Institute for Development and Research in Banking Technology.
Comparison Table Between Internet Banking and NEFT (in Tabular Form)
| Parameters of Comparison | Internet banking | NEFT |
|---|---|---|
| Purpose it servers | It allows consumers to access their bank accounts and make any transactions without physically attending any of the branches of financial organizations. | It enables bank customers to transport funds between any two NEFT-enabled bank accounts on a one-to-one purpose and is done via electronic messages |
| Maximum transfer limit | 2 lakhs | No Limit. Every transaction is capped to Rs.50,000 |
| Service timings | Accessible 24×7 | Accessible on all the working days except 2nd and 4th Saturday of the month, inaccessible on Sunday and Bank Holidays. |
| Transaction charges | In internet banking a bank charges a sum of Rs 20 for each financial and a sum of Rs 8.5 for each non-financial transaction. | No charges for inward transactions |
| Mode of payment | Online | Online and offline |
What is Internet Banking?
Internet banking is a faculty given by banks that allow customers to use banking assistance over the internet and is also known as online banking or e-banking. Customers can avail of every small service by just sitting at their homes.
Internet Banking is an easy medium to use and it saves a lot of time and effort and is pretty safe but there are some precautions to be taken while handling accounts online.
Features of Online Banking:
- You can check the statements of your account online.
- You can open a hard and fast time deposit account online
- You paybills likewater and electricity bills.
- You can make merchant payments online
- Transfer funds easily.
- The checkbook can be ordered.
- It can buy general security.
- You can recharge mobile/DTH.
Advantages of Internet banking:
- Internet banking is easy to Operate: There is no need to visit the branch of your bank, many people find it convenient to operate their transactional activities by a few clicks.
- You can track your transactional Activity: There are possibilities of losing the acknowledgment receipt that you receive when you make a transaction at the bank but when you perform the same transaction via bank’s internet banking portal, it will be recorded. If required, then this can be shown as proof of the transaction.
- Time Efficient: It takes your minutes via internet banking to complete the transaction. You can transfer your funds to any account within the country or you can even open a fixed deposit account within few minutes on internet banking.
Disadvantages of Internet banking:
- Transaction Security: Online transactions are still susceptible to hackers, no matter how many precautions banks take to provide a secure network. Irrespective of the highly developed encryption methods used to keep user data safe still there have been cases where the transaction of data is compromised and this may cause a major risk such as using the data unlawfully by hackers for their benefit.
- Internet Requirement is a must: For internet banking, internet access is an only condition. You cannot make use of any services offered online until you have an uninterrupted internet connection. Similarly, if by chance due to technical issues the bank servers are down, then also you cannot access net banking services.
- Securing Password: The password must be entered to access the services and this is required in every internet banking account. A key role is played by the password in maintaining reliability. Others may utilize the information to formulate some scam if by any chance the password is exposed. The password you choose must obey the rules affirmed by the banks. To secure your account from robbery, one must change the password regularly and this can also be a fuss to remember the password by the owner himself.
What is NEFT?
National Electronic Fund Transfer enables the customers to transfer funds quickly is securely from one account to the other. It is one of the most prominent electronic fund transfer systems of India, provided to people by banks.
National Electronic Fund Transfer is operated based on (DNS) i.e. deferred net settlement and this settles the transactions in batches. The settlement occurs only at a particular point in time.
Features of NEFT are:
- Saves time and effort
- Payments occur electronically
- Payments occur over a secure mode
- There is no transactional fee
Advantages of NEFT
- It is safe and effective – NEFT helps you to transfer any amount of money speedily as it is a faultless transfer of funds on the Internet.
- Requires low Processing Charges– Due to its flexible payment option, NEFT is very reasonable. You can utilize this faculty in which you don’t have to pay a giant sum of money to the bank and you can transfer any amount of money without any complexity.
- Highly Dependable– NEFT is an essential feature of Internet banking and is a highly reliable way of receiving funds and making payments online. In India, the majority of the banks are synchronized under the standards set by RBI and this facility is safer to use.
- Rapid Settlement– NEFT transfers funds quickly, with the usual banking methods of fund transfer, and there is a benefit of rapid agreement of accounts.
Disadvantages of NEFT and Internet Banking
- Highly Technical – One of the major drawbacks of NEFT transfer in India is that it is a highly technical way to transfer funds which is not easy for everyone to operate. A person with little information on computers and of the Internet might not be able to operate an Internet banking account effortlessly.
- There Risk involved with Online Payments – Most of the banks in India take proper steps to secure an NEFT transaction but to a certain extent it can be possible that the information you are providing online might get passed on to a hacker if you’re not using a secured browser and this is one of the most crucial reasons that many people across the country don’t believe in this facility.
Main Differences Between Internet Banking and NEFT
- Net Banking is the facility to conduct the financial transactions through a secure website whereas NEFT’ is an electronic fund transfer system in which transactions are settled in batches during specific timings
- Money Transfer System in internet banking is generally instant whereas in NEFT it usually takes up to 48 hours.
- Coverage in Internet banking is both nationally and internationally whereas in NEFT transactions are within the Nation.
- Usage in internet banking is in all routine transactions, such as account transfers, balance inquiries, bill payments, and stop-payment requests whereas NEFT electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country.
- There is no holiday restriction in internet banking whereas holiday restrictions are there in NEFT.
Conclusion
The world is evolving with the advancement of technology. Transactions of money are becoming easier and handy for people, now we can transfer money from anywhere in the world to our closed ones with just a few clicks. Internet banking has made a lot of things easier for customers due to advancements in technology.
Both Internet banking and NEFT have a similar origin and serves a similar purpose to the customers. But due to the lack of knowledge, many people are in need to be taught about the uses of the internet, so that they could easily transfer or get funds.
References
- https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=2759208#page=34