THERE are different types of funds transfer services and it is important for bank customers to understand the differences and implications. Fund transfer is when you send money to person or persons from your bank account using a transfer channel. You can transfer funds to people living within and outside the country using various transfer channels.
NEFT and NIP
The Nigeria Interbank Settlement System Electronic Fund Transfer (NEFT) and Nigeria Interbank Settlement System Instant Payment (NIP) are examples of electronic funds transfer. They are irrevocable funds transfer instruction. You must have a bank account to be able to use NEFT or NIP to transfer funds.
How does it work?
You can transfer funds through NEFT by first logging into your bank’s internet banking platform using your ID and password. Then you go to fund transfer tab and select add beneficiary (receiver’s bank). Select beneficiary type for example transfer to other bank then enter the account number of the beneficiary. Click on send. The bank will first debit your account to ensure that the funds are set aside. Then your instruction (along with other customers’ instructions) are sent to NIBSS by your bank as an electronic file for onward processing.
For NIP, if you are using your personal computer log into your bank’s internet banking platform. Click account transfer tab to expand it. Click on transfer to other bank (instant). If you are using mobile money android application, select NIP. If you are using it for the first time activate it with your token. Then click new request. Select add new beneficiary to add the receiver’s bank account details. Fill all required details and enter the code from your token device. Then send. Transfer to other banks will incur charges.The options of NEFT and NIP are also provided in the funds transfer forms in the banks. Hence you can perform any of the two by visiting your bank and complete the funds transfer, indicating NEFT or NIP as your preferred transfer type.
The differences between NEFT and NIP
Despite the similarity in both products, they differ in terms of processing timeline and limits of transfer, as highlighted below:
- For NIP the recipient get the value within 10 minutes after the sender has made the transaction (baring network failure).
- For NEFT the receiver gets value the next day (sometimes up to 24 hours) after the sender has executed the transfer.
- You can use NEFT for bulk transfer, which is funds transfer to many recipients at the same time. However, NIP can be used only to transfer money to one or two people at the same time.
- Also, NIP has a maximum limit of N5 million for transfer to individual and N10 million for transfer to corporate body. For NEFT, you can transfer as high as N100 million.
This article was extracted from Vanguard News