Before start and understand the meaning of the beneficiary account let us break the word into two. We all know what is bank account so the term “account” from this word is clear to all of us. The thing we should now know is the meaning of the term “beneficiary”. Here the meaning is the person who is deriving the advantage of something.
In simple language related to the Indian banking sector, the meaning of beneficiary is the person who is receiving the money. So we now know the meaning of this term but we should also know that there are multiple types of beneficiary accounts. I have explained the types below.
Type 1: Intra Bank
When you want to send the money from your bank account to another bank account which is with the same bank. Then in this case it is termed as Intra Bank. It is nothing but the account within your bank.
For example, you have an account with the State Bank of India, and the person to whom you want to send money also holds an account with it.
Type 2: Inter-Bank
As the name is suggesting to us it is an account that is not in your bank. Even then it is a part of the Indian financial system that is why you are able to easily add it to your bank account.
For example, you have your account with the State Bank of India. And the other person to whom you want to send money has an account with ICICI Bank. Then it is called Inter Bank.
Are then any Other Types in Intra and Inter-Bank?
So far we have understood that broadly there are 2 types of beneficiary accounts that you can add. But let me tell you that there are subtypes too.
This does not happen in all banks. But in a few banks while you are adding a new beneficiary the system will ask you if you are adding it for NEFT, RTGS, or IMPS.
If you want to read about NEFT, RTGS, and IMPS the best website on the internet is the NPCI. That is because they are the ones who manage these payment systems.
Are Beneficiaries Activated Instantly?
No, once you add the bank account details it will not be instantly activated. It takes at least 30 minutes for the system to allow you for money transfers.
I have noticed this in the case of the State Bank of India, IDFC FIRST Bank, and IndusInd Bank as well. So by this, we can say that the beneficiaries are not instantly activated.
Can I Send Money Without Adding the Account?
In some cases, I understand that people won’t be having time to add the account details. And then wait for it to get activated to address this issue the banks have something called “Quick Pay”.
This works on the IMPS mode of money transfer in which you can send the money without waiting for the activation. But there is a limit for the maximum amount you can send and this changes from bank to bank.
Ok, So How Can You Add One?
So far we have discussed so many things and have understood the core concepts about the beneficiary account. Now let us also understand the ways how you can add one to your account.
There are two methods of adding it to your bank account and they are.
Internet Banking: Login to your internet banking account and go to the fund’s transfer section. There will be a beneficiary management section. Select the option to add a new one and enter all the required details.
Mobile Banking: Open and login to the mobile banking app of your bank. The process remains the same you have to go to the beneficiary management section of the app and add a new one.
What are the Required Details?
While adding a new beneficiary you have to enter the below-mentioned details.
• Account Holder’s Name.
• Bank Account Number.
• Bank’s Name.
• IFSC Code. (for interbank)
• Maximum Limit of Transfer.
If you are a customer of the State Bank of India and can not wait for the activation. Then you choose the branch model for the activation which will help you get it activated instantly. But for that, you will have to visit your home branch. Keep in mind that the banks won’t charge even a single rupee to activate add and activate your beneficiary.