AbstractDifferential relays security to the external faults is affected by the saturation of branches’ current transformers (CTs). In this paper, a simple scheme is proposed to enhance the security of differential numerical relay by extracting the 2nd order harmonic using Fast Fourier Transform (FFT) to produce a restraint signal to inhibit the relay operation during external faults. The operation signal of differential relay is produced by comparing the vector addition of secondary currents of branches’ CTs (differential current) with pre-set value; the restraint signal is produced by comparing the algebraic sum of 2nd order harmonic of individual secondary currents with the 2nd order harmonic of differential current. The proposed scheme is investigated using PSCAD/EMTDC simulation and tested during internal and external faults for saturated CTs. The obtained results reveal how this scheme is effective and secure to the external faults for different suggested scenarios. The proposed scheme is using the simplest technique of signal processing compared to other proposed techniques.