Wednesday, April 15, 2009

Fund transfer methods in India

Better ways for transferring funds in India.


Transfer funds from one bank account to another account in India can be done in many ways.
Online transfer is the easy and convenient way for doing fund transfer. Now almost all the banks provide internet banking to their customers. If you don't have online access to your bank account, then you can go for other ways like cheque deposit, demand draft, cash withdraw and deposit etc.

Online Transfer


This method can be used to transfer funds from any account to any account in India at anytime, from anywhere in the world. That is you can do fund transfer from anywhere for your account to any other account. If the transfer is between the same banks (Citibank to Citibank, State Bank group to State Bank group, etc), then the transfer will be immediate irrespective of the time, and at present there is no charge involved for the same. If the transfer is between different banks, then you have to do NEFT or RTGS mode of transfer. The minimum amount for RTGS mode is 1,00,000 Rs, and this is real-time transfer. NEFT transfer request needs to be submitted and it takes place during the next batch of transfers. For more about how the NEFT transaction takes place, and the time at which the transfers takes place, read my post here.
NEFT transaction
Regarding the charges, now some banks charge a flat fee of Rs 5 for NEFT transaction done upto 1,00,000. Earlier RBI has waived this fee till March 31, 2009, and had requested banks to charge amount not exceeding Rs 5 upto 1,00,000 Rs.

Pros
You need not be present at the place of the branch.
Can transfer at anytime.
Outstation cheque collection charge, DD charge or travel to bank is saved.

Cons
Risk of phissing or some fake sites collecting username and password.
Online transfer can be done only to banks which was under core banking.

Cash withdraw and deposit


If you don't have access to online banking for your account, then this is one of the way by which you can transfer funds from one account to another. If the source account and destination account are at different banks, then you need to withdraw cash from ATM, and then deposit it in the bank at which the destination account lies. If both the account are at the same branch, then it is so simple that the transfer can be done at the counter by filling the withdrawal slip with a cheque leaf and a deposit slip.

Pros
The good thing about this method is that the fund will be available immediately once the deposit is done.

Cons
The bank holding destination account needs to be easliy accessible to you. Else if you deposit it at any other branches of the same bank then there will be some charge for that.
This can be done only at the working hours of the bank.

Cheque deposit


If you are not hurry for your transfer, then you can drop a cheque at the destination account branch. In 2 days the amount will get transferred. If the source account is in outer station, then outstation collection charges will be applicable if it is ordinary cheque. Otherwise you need to drop MCC (Multi City Cheque) to avoid charges.

Pros
No hassle of carrying cash to bank.

Cons
It will take upto a maximum of 2 days for the fund to get transferred.

One other way is transferring funds through ATM. For State Bank group ATM cards used at State Bank group ATMs, there will be link called Transfers, If you go there, there will be something called Visa Transfer. It will ask for the destination card accout card number for which the transfer has to be done. I have not done this anytime. But enquired at State Bank customer care and they said that it can be done to only State Bank group cards.

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I am a Software Engineer based in Chennai, India. My hobbies are blogging, driving. You can contact me here, http://sameerbloggs.blogspot.com/2009/03/contact-me.html

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Disclaimer: All the information given in this blog is only my ideas and knowledge what I got from internet or other sources. For any interest rate, charges etc check the particular service as the charge might have changed. Regarding the intraday trading tips, this is applicable for that day only and also shouldn't be taken as advice. All the actions taken by you is responsible by you only. Thanks.

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