Ultimate Guide to Real-Time Gross Settlement (RTGS)

In case you’re always working with money, you might be looking for transaction methods that meet your needs. Maybe you heard about real-time gross settlements but are not sure what they actually are and how they work. Keep on reading for the ultimate guide on RTGS to see if this approach is right for you.

What is Real-Time Gross Settlement (RTGS)?

Real-time gross settlement refers to a system used to transfer money or securities instantaneously. It is the continuous process of settling payments without requiring netting debits with credits. These transfers on an individual order basis are final and irrevocable once completed. RTGS transfers are available to individuals, businesses, and organizations.

Funds can be transferred via the RTGS method in two ways. For one, most banks allow users to transfer funds via internet banking. Before sending funds to someone, you first have to add them online using the net banking facility. Then, you can transfer money or securities into their account with just a few clicks. On the other hand, you can also visit a local branch of your bank and fill in the RTGS form in order to transfer the necessary funds.

How does it work?

When it comes to how RTGS works, it’s important that you understand that real-time means that the settlement will happen as soon as it is received, i.e. as soon as your bank transfers it to the receiving bank, the transaction will be settled. Then, the gross settlement part of the term means that each transaction is handled and settled individually. This type of fund settlement is typically used for high-value bank transfers.

What do you need to make an RTGS transfer?

So, what do you need in order to make an RTGS transfer? To start a transaction, you need the remitting account retails and the IFSC number of the receiving bank. Then, the names of the beneficiary customer, bank, and branch are also necessary. The beneficiary account number, the amount you are transferring, and notes (if you have any) will allow you to complete the form.

You want to start by logging into your bank account, going to the transfer section, and picking the RTGS option. You will first have to add a beneficiary and all the necessary account details. It can take a few days for the beneficiary to be added to your account, after which you can transfer the funds. Once you confirm the transaction, it cannot be canceled. However, if this whole process sounds too complicated, you can also turn to companies such as Cuscal Payments that will handle the transactions on your behalf.

What are the benefits of RTGS?

Using real-time gross settlement comes with many features and benefits that you will surely appreciate. For starters, having more payment options is always a great way to attract customers and partners.

Then, using RTGS minimizes the risks associated with high-value payments that can happen between banks and financial institutions. Even though financial institutions have notably high levels of cybersecurity, cybercriminals are constantly evolving their ways. That means that having a method that is as secure as possible is always welcome. As transactions happen in real-time, there is a small window of time where sensitive information is vulnerable so your data is safe and secure from potential dangers posed by hackers.

Another advantage is the fact that these transfers can be done online, as we already mentioned. With that in mind, you can make a payment straight away and not have to wait for a bank to open.

If you don’t mind waiting for a bank to open, you might also like that the transfers have no limit. You can transfer any amount of money by visiting a branch.

Are there any fees?

In addition to all the benefits listed above, it’s essential to say that real-time gross settlement transactions don’t come with a fee. Irrespective of the bank, there should be no charges for RTGS transactions.

Are there any time constrictions?

You also might be wondering if you are restricted by time in any way when making an RTGS transfer. No, all transactions are possible 24/7 if you have internet banking. While they used to be constricted by banking hours, you can now make a transaction whenever it suits you. 

If you’re thinking about using a new payment method, RTGS is certainly something to consider.

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