India is currently home to 140 crore people with access to better banking services than at any point in the past. Earlier, customers had to make multiple visits to their bank and stand in the long queue just to transfer money. Online money transfer, however, is now making money transfers simple and convenient.

With just a phone and the internet, you can transfer money anywhere and anytime. Till December 2024, India recorded over 516.06 crore online transactions. Over 95% of all bank transactions are now made online. Explore the benefits of online money transfer, the best way to transfer money online, and how safe it is.

What is Online Money Transfer?

Online money transfer, or electronic funds transfer refers to sending money from one account to another through the internet. You can send it from your personal computer, laptop, or smartphone without leaving your home or visiting the bank.

From a money order via post to a money transfer via the internet, digital banking is making it easier to move funds. Whether you are a renter sending rent to the tenant, paying a friend back for dinner, or sending money to your parents, you can send money transfers online with speed, comfort, and ease.

Benefits of Online Money Transfer

Here are all the benefits of online money transfer you must know before transferring your money online:

• Speed: Whether you are using UPI or IMPS, your transaction is settled in real-time without waiting hours or days.
• Convenience: You don’t have to go to a bank, fill out forms, or stand in line. You can transfer money online from anywhere, anytime, with just one or two clicks.
• Reduced Prices: Particularly for international remittances, online transfers often offer lower costs than conventional bank wire transfers or money order services.
• Convenience and Usability: There is no need to visit a bank or complete documentation. Transfers can be completed with a few clicks on a web portal or smartphone app.
• Security: Online money transfers are safeguarded with real-time fraud detection systems, multi-factor authentication (MFA), and end-to-end encryption.
• Global Accessibility: Mobile applications and online banking provide round-the-clock access to send and receive money locally and globally.
• Traceable: Every transaction has a digital record. So, in case of a dispute, you have evidence of the transfer.

What are the Most Common Methods of Online Money Transfer?

There are many online money transfer options in India that you can choose based on your convenience and need.

1. UPI (Unified Payments Interface)

The value of UPI transactions in January 2025 hit ₹23.48 lakh crore, surpassing 1690 billion, the biggest amount ever recorded in a single month. It shows that UPI is one of the most favourite options for many Indians. All you need is a UPI ID that is linked to your bank account. PhonePe, Google Pay, Paytm, and BHIM apps enable you to send money in real-time.

• No need to punch in lengthy account numbers.
• Instant transfers, even on national holidays.
• 24×7 working hours.

2. NEFT (National Electronic Funds Transfer)

NEFT, short for National Electronic Funds Transfer, is a bank-to-bank transfer. It is best when you are transferring money to someone’s bank account and do not want to use apps. It can be done via Internet banking or mobile banking.

3. IMPS (Immediate Payment Service)

If you want to send money instantly, IMPS is the best option as it is quicker than NEFT. IMPS transfers are settled in real-time. It is also available 24×7, including Sundays and all bank holidays. Here is how to transfer money via IMPS:

• Open your net banking or mobile banking app and log in.
• Select Fund Transfer and choose IMPS as the mode of transfer.
• Provide details like mobile number, IFSC, bank account number, and recipient name.
• Use an OTP or UPI PIN for authentication.
• Money is transferred right away.

4. RTGS (Real-Time Gross Settlement)

If you need to send a large amount of money (typically ₹2 lakh or more), RTGS is the best online money transfer method. Unlike IMPS, it works with large amounts. This is why it is popular among companies and business owners.

5. Wallets and Payment Apps

Apps such as Paytm, Amazon Pay, and Mobikwik allow you to add money to your wallet and send money online using a mobile number. While these are not bank transfers, they are useful when you need to make small payments, such as mobile recharges or bill payments.

6. Electronic Funds Transfer (EFT)

Electronic Funds Transfer or ETF is a broad term for all electronic modes of funds transfer, like UPI, NEFT, IMPS, etc. It simply refers to any transfer of money made electronically, with no cash or cheque involved.

How to Transfer Money Online (Step-by-Step Guide)?

There are 2 best ways to transfer money online: UPI and Electronic Funds Transfer. While UPI offers more convenience and easy accessibility, it also has limitations as you can only transfer up to ₹1 lakh. This is where electronic fund transfer proves more useful, as you can send higher amounts.

How to Transfer Money Online via UPI?

• Download a UPI app (such as Paytm, Google Pay, or PhonePe).
• Enter your mobile number that is connected to your bank account.
• Use your debit card to create a UPI PIN and link your bank account.
• Select the receiver using their bank information, UPI ID, cell phone number, or QR code.
• To verify the payment, enter the amount and UPI PIN.
• Receive immediate confirmation that the funds have been moved!

How to Transfer Money Online via NEFT, IMPS or RTGS?

• Open the mobile banking app or the website of your bank and log in.
• Add the receiver (beneficiary) by providing details like name, bank name, account number, and IFSC code.
• Await beneficiary approval, navigate to “Fund Transfer”.
• Now choose a mode of payment transfer from NEFT, IMPS, and RTGS.
• Enter the amount and any optional payment notes.
• Verify using a transaction password or OTP.
• A confirmation will be sent to you when the transfer is done.

Fees Associated with Online Money Transfers

Most online money transfers are free of cost or charge a very small fee:

• UPI: Free
• NEFT: Free if you do it from your mobile online. However, if you do it via a bank, then the bank may charge from ₹2.50 to ₹25 per transaction.
• IMPS: ₹1-15 based on the amount and the bank.
• RTGS: ₹24.50 + GST for 2-5 lakhs. ₹49.50 for transactions above ₹5 lakhs.
• Wallets: Free

Is Online Money Transfer Safe?

Safety is the biggest concern for most people when transferring money online. Online money transfers are safe as they are safeguarded by two-factor authentication, OTPs, passcodes, and more. However, they are still susceptible to fraud as they are online. Banks and mobile apps do a good job of encryption, but human error is the vulnerable point. So stay alert always.

Tips for Secure and Smooth Online Transfers

Even though online transfers are safe, you need to be careful to protect your hard-earned money. Here’s how to make your online money transfer process go smoothly and securely:

• Use Authorised Apps Only: Use only authorised apps like Google Pay, PhonePe, Paytm, BHIM, or your bank’s app. Never download apps from the internet or from some unknown source.
• Never Share Your OTP or UPI PIN: Fraudsters usually impersonate bank officials or customer care and request your OTP or UPI PIN. Never share your OTP with anyone.
• Confirm Receiver Details: Before you send money, always ensure that the name and the recipient’s UPI ID or account number are double-checked. Even one wrong digit or number can send money to the wrong person.
• Be wary of fake Payment Links and QR Codes: Scammers can send you fake payment links or QR codes. Never scan a code to receive money when asked, and scan only when making payments.
• Turn on Transaction Alerts: Turn on the SMS and email notifications for your bank account and payment apps. Thus, you will immediately be notified of any suspicious transaction.
• Lock Down Your Phone: Use a screen lock (PIN, fingerprint, pattern, or face recognition) to prevent misuse. If your phone is stolen, it will be harder for an unknown person to use your payment apps.

Conclusion

Online money transfers are a part of our lives, whether transferring money to a shop, a friend, or purchasing online. The best way to transfer money online depends on the amount you want to send, the charges associated, the urgency, and your needs.

FAQs about Online Money Transfer

1. Can I send money online without linking my bank account to the UPI app?
   No, you cannot. UPI apps need you to link a bank account to send or receive money. Some wallet apps, such as Paytm, permit small wallet balance transfers without a linked bank.
2. Why did my NEFT transaction not get updated immediately in the beneficiary’s account?
   NEFT is batch-based and may take up to 2 hours during banking hours. If it is done after banking hours or on holidays, it will be done on the next working day.
3. What if I provide the wrong UPI ID while transferring money?
   If the UPI ID that you entered is valid, then the amount will be credited to that person and will be difficult to get back. Hence, it is always necessary to verify the UPI ID and details displayed before sending money.
4. Can I get the money back if I transferred it to the wrong person?
   No, internet transfers are irreversible and instantaneous. You can contact your bank or the app’s support team, but there is no assurance unless the receiver agrees to return your money.
5. Are there any daily limits on how much money I can send online?
   Yes. There is a daily limit (typically ₹1 lakh a day) with UPI. IMPS, NEFT, and RTGS also have bank-imposed limits. You can see and change them with your bank’s app or net banking.