What is IFSC Code & Why It Is Essential for Fund Transfer

IFSC Code

The IFSC (Indian Financial System Code) is a unique eleven digit code which is a combination of numbers and alphabet. IFSC code used to identify a bank branch when you transfer funds online for RTGS, NEFT and NEFT transaction. The bank branches participating in any internet banking fund transfer process must have IFSC code. Online funds transfer using RTGS, NEFT and IMPS can’t be processed without the Indian Financial System Code.

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The IFSC code of each bank branches in India is assigned by Reserve Bank of India (RBI). Usually, Indian Financial System Code is found on the cheque book and front page of the account holder passbook is issued by your bank. You can also check the IFSC code of your bank branch on the official website of Reserve of India.

The format of Bank IFSC Code

As you know IFSC code is unique eleven digit code where the first four characters represent the bank. The fifth character is zero (0). And the last 6 characters are a number represents the specific bank branch code. For example, IFSC code of ICICI bank Mumbai Andheri branch is ICIC0000011.

Benefits of IFSC Code

  • Unique Identification: Allows to identify a bank and its particular branch.
  • Net Banking Transaction Made Easier: You can transfer your funds easily with IFSC code such as RTGS, NEFT and IMPS.
  • Elimination Errors: Securely transfer funds without any error.

Importance of IFSC Code

For Reserve Bank of India IFSC code helps to monitor all net banking transaction like RTGS, NEFT and IMPS without any blunders.

For bank account holders this code is very important because for transfer funds online to beneficiary or payee account you must need IFSC code along with bank account number.

Apart from electronic funds transfer Indian Financial System Code is also used purchase mutual funds and insurance through online net banking.

Also Read: Best Tax Saving Investment option under Sec 80C

Ways of Electronic Fund Transfer Using IFSC Code

As we discuss above IFSC code is mainly used for electronic fund transfer such as RTGS, NEFT and IMPS. With the help of this methods, a customer can easily transfer funds from one account to another account without visiting a bank branch.

National Electronic Fund Transfer (NEFT)

National Electronic Fund Transfer (NEFT) is one of the most popular fund transfer systems to send money from one account to another account in India. This method started in November 2005 is based on a deferred arrangement that means all NEFT transaction are settled in different sets.

Make sure you cannot transfer funds at any time using NEFT. In bank working days there are total 12 payment settlements between 8 am to 7 pm and on Saturday there are 6 payment settlements between 8 am to 1 pm. So this service not available on bank holidays and weekends.

If you want to transfer funds of less than Rs 1 lakh then you need to pay some charges of Rs 5 per transaction. If the transfer amount is more than Rs 1 lakh then you need to pay Rs 25.

Real Time Gross Settlement (RTGS)

The Real Time Gross Settlement (RTGS) is basically used for high-value fund transfer is same as NEFT. As the name suggests you can transfer funds instantly in real time from one bank to another. So there is no waiting to complete the transaction.

The minimum amount you can transfer using RTGS is Rs 2 lakh. There is no any maximum amount transfer limit for RTGS. This service available from 9 am to 4:30 pm on bank working days and from 9 am to 2 pm on Saturday.

Before transferring fund using RTGS make sure the beneficiary bank account RTGS service is enabled. To initiate RTGS transaction you need payee details like full name, account number, IFSC code and transaction amount. This service is a bit costly then NEFT because for Rs 2-5 lakh you need to pay Rs 30 and transaction above Rs 5 lakhs charge you Rs 55.

Also Read: Short Term Loans Every Business Owner Should Know

Immediate Payment Service (IMPS)

The Immediate Payment Service (IMPS) is an instant fund transfer service available 24*7. IMPS allows you to fund transfer even in bank holidays so you can use this service anytime you want. This service founded by National Payments Corporation of India in 2010.

You can use a mobile phone or net banking to transfer funds through IMPS. If you want to transfer fund using a mobile phone then you must need MMID (Mobile Monet Identifier) verification code for IMPS. This code issued by the bank for IMPS service. The best part of this service payee doesn’t need to get registered for use this service.

If you want to transfer up to Rs 1 lakh using IMPS then your bank charge Rs 5 and for a transfer between Rs 1-2 lakh you can charge up to Rs 15.

And if you frequently transaction online then you must aware of how to protect your data from unexpected disaster.

Some Frequently Asked Question of IFSC Code

1. Is IFSC code and Branch code is same?

No, IFSC code is not same as branch code but branch code is a part of the IFSC code. The last six digits of Indian Financial Code represent the IFSC code.

2. How much time will it take to complete NEFT transaction?

NEFT transaction complete instantly but sometimes it can take up to 30 minutes.

3. What if wrong IFSC code entered during fund transfer?

In case if you entered incorrect IFSC code then fund get reversed to your account within 2-3 hours.

4. Can we cancel NEFT payment?

Once you initiate NEFT payment using IFSC code it cannot be canceled.

5. Can we find IFSC code using account number?

No, you can’t find IFSC code using account number but you can find it in your passbook and cheque book.

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