What is UPI Circle? A Beginner-Friendly Guide

The way payments are evolving in India is rapid, with UPI (Unified Payments Interface) already driving digital payment innovation and making transactions simple and widely accessible. It has also become a key part of the Digital India movement and the government’s push towards a cashless India movement.

Recently, the National Payments Corporation of India (NPCI), under the guidance of the Reserve Bank of India (RBI), launched a new feature called UPI Circle to make group payments smarter, safer, and more transparent. 

This blog explains its meaning, how it works, its benefits and how it supports broader financial goals in India.

What is UPI Circle?

The National Payments Corporation of India (NPCI) has recently introduced UPI Circle as a new feature to enhance the UPI experience. It enables users to form their own private or semi-private groups in order to manage their shared payments, group expense management, or recurring digital payments easily. It acts as a smart tool to simplify transactions among a trusted group, whether it’s splitting rent with flatmates, handling club or society fees, or tracking shared expenses with friends or colleagues. UPI Circle supports UPI group payments and replaces paper reminders or schedules, as this type of service allows automating, sending, and tracking payments within the group.

Security Features in UPI Circle

UPI Circle prioritises safety with advanced UPI security features, ensuring your group transactions are protected at every step:

  • End-to-end encryption: All transactions are encrypted from sender to receiver, ensuring privacy and preventing interception by hackers or unauthorised parties.
  • Multi-factor authentication: Payments require UPI PIN or similar verification, adding an extra security layer before transactions are processed successfully.
  • Protection against unauthorised access: Even if someone gains access to your phone, funds cannot be transferred without proper UPI PIN verification.
  • Admin-controlled permissions: Group admins can restrict withdrawals, ensuring no member moves funds without explicit approval, reducing risk of misuse.
  • Detailed activity logs: Every incoming and outgoing payment is recorded, enabling transparent tracking, auditing, and accountability among all group members.

How Does UPI Circle Work?

Using UPI Circle, a group admin can create a circle of users with their UPI IDs or mobile numbers. Inside this circle, the admin can send payment requests, track who has paid, and even set up recurring payment requests. This makes shared expense tracking simple, transparent, and convenient for everyone in the group.

For example:

  • Create a Circle for Shared Rent: You and your three friends share rent, and you build a ‘Flatmates’ circle on your UPI app.
  • Set Monthly Payment Requests: Create a monthly payment request of ₹5,000 to each of your friends and due date as the 3rd of each month.
  • Friends Get Automatic Notifications: Your friends will get automatic notifications about the payment request on the specified date, and you do not need to follow up manually.
  • Track Who Paid and Who Didn’t: You will also be able to see in real-time that you have paid, plus who still has to pay, all in one location.

UPI Circle Limit

Just like regular UPI transactions, the UPI Circle limit is governed by the daily UPI transaction limit set by banks and NPCI. This ensures that transactions remain safe and controlled while still being flexible for group usage. The feature is also a part of NPCI digital initiatives aimed at making digital payments smarter, more reliable, and easier for users. As of now:

  • Most apps allow ₹1 lakh/day per individual.
  • The same limit applies to group transactions inside UPI Circle.
  • Some banks or apps may set lower limits, so always check in-app notifications.

Because it is governed by NPCI and RBI rules, users can trust that limits are standardised and funds are protected.

How to Use UPI Circle?

Here’s a step-by-step breakdown of how to use UPI Circle:

  1. Download a UPI-Enabled App: Download and open any UPI-supported app, such as BHIM, PhonePe or even your bank app, to start creating a circle.
  2. Find the UPI Circle option: This can be found in the app menu by searching for something like Circle or Group option; it can also be listed under payments or the UPI section.
  3. Create and Name Your Circle: Start a new circle and give it a defined name, such as Office Snacks Fund or Weekend Trip Contributions.
  4. Add Members to the Circle: Add by Upi or mobile numbers, and people will be sent an invitation to join your circle group.
  5. Set a Payment Request: Just state how much and when, and why. This assists members in knowing the purpose of the contribution and when to do it.
  6. Send the Request to Members: When it is set, send the request. Every member will receive an in-app notification to pay the amount that you have assigned.
  7. Track and Get Payment Updates: You will be notified who has made a payment and who has not. The app keeps you informed of payments on a real-time basis.

What are the Benefits of UPI Circle?

UPI Circle brings a host of benefits that make managing shared expenses much easier:

  • Easy Group Payments: Group payments can be conveniently organised in a single setup, with recurring reminders, and can be easily tracked without any need of embarrassment that comes with following up on payments.
  • Transparency: All transactions, payment history, and dues are visible to all the members of the circle, ensuring a seamless payment experience without any ambiguity, unlike the traditional method of cash collection.
  • Saves Time: No more spreadsheets and manual tracking. The app has everything concerning the payment arranged and visible to all in real-time.
  • Recurring Requests: Great to repeat similar costs such as a rent payment, OTT subscription, or group savings with a set automatic reminder and automatic collection of money.
  • Safe and Secure: All transactions are encrypted and secure with the backing of UPI and controlled by RBI, hence the security of the user is guaranteed.

UPI Circle and Digital India

The launch of UPI Circle also ties into India’s Digital India and Cashless Economy vision, reducing dependence on cash-based collections and increasing formal financial adoption in groups and societies.
By digitising small, recurring, and group-level transactions, NPCI and RBI are encouraging financial inclusion and building stronger trust in digital payments.

Use the Fibe Axis Credit Card for UPI Circle Payments

One unique benefit for Fibe users is the Fibe Axis Bank Credit Card. You can link it to UPI apps and use your credit line for UPI Circle contributions.

  • Earn rewards on group expenses.
  • Extend repayment flexibility while settling shared dues.
  • Enjoy benefits unavailable with a normal bank account.

This makes UPI Circle not just a convenience tool but also a credit-friendly solution for young professionals and students.

FAQs

Which banks have the UPI Circle?

Major banks in India that participate in UPI, such as HDFC Bank, ICICI Bank, SBI, and Axis Bank, among others, are likely to sponsor UPI Circle under their partner apps. The availability can be based on updates to the app.

Which app is best for UPI Circle?

The UPI Circle was launched first through the BHIM App by NPCI; thus, it is one of the most reputable platforms. The feature will be released gradually by other apps such as PhonePe, Paytm, Google Pay, and the banking apps.

Is UPI Circle safe?

Yes, UPI Circle is safe. It is RBI-regulated, NPCI-powered and fully encrypted, making it more reliable than third-party group expense apps.

Can UPI Circle be used for businesses?

Yes, small businesses, societies and offices can use UPI Circle for shared fund management, vendor payments and petty cash handling.

What is the Best Date to Set Up an SIP?

Starting a Systematic Investment Plan (SIP) in a mutual fund often raises the question of selecting an appropriate investment date. While it may appear minor, there is no best SIP date that guarantees higher returns for your mutual fund SIP. This article explains the concept of SIP dates, how they work, and whether the selected date can influence returns.

What Does SIP Date Mean?

SIP date is the particular day of the month when your money is invested. The majority of the mutual fund companies provide you the option to select any date between the 1st and the 28th, some are more flexible, and you can have more than one SIP date. When creating your SIP on a mutual fund platform or app, you’ll usually see the option to choose the SIP day of your choice by selecting the option to Select your desired day of SIP.

Is There a Best SIP Date?

The short answer is: not exactly. There is no best SIP date that guarantees higher returns. This is due to the fact that mutual fund investments are supposed to be influenced by the movement of the market, and the market does not move in a predictable pattern on the basis of the calendar. Unlike a lump-sum investment, a SIP spreads your investments over time, reducing risk and benefiting from market fluctuations.

But, there are some practical things that you can take into consideration to select a SIP date that best suits your personal convenience and financial routine.

Factors to Consider When Choosing the Best SIP Date

Here’s what you should consider before deciding on your SIP date:

1. Cash Flow & Salary Credit

One of the simplest ways to pick the best date to invest in SIP is to align it with your income cycle. Suppose you earn a salary on a monthly basis on the 1st of every month, then it will be in your best interest to fix your SIP between the 3rd and 7th so you always have enough money in your account. This also ensures smooth payment through the NACH (auto-debit mandate system), preventing unsuccessful transactions due to a low balance.

2. Market Timing Myth

Some investors believe that investing earlier in the month leads to better returns than investing later. But market ups and downs happen randomly, and your SIP buys units at the prevailing NAV (Net Asset Value) on the chosen date. Whether you invest on the 5th or the 25th, over the long term, the difference is usually negligible.

SIP averages out your buying price through a process called rupee cost averaging, which reduces the impact of market volatility. This means the exact date of investment doesn’t significantly affect long-term performance, as you buy units at different market levels across months, balancing highs and lows.

3. Multiple SIP Dates for Staggered Investment

Some advanced investors prefer to split their monthly SIP into two or more dates, say the 10th and 25th. The idea is to smooth out short-term market volatility. But again, this is a personal choice and not necessary for beginners.

If you’re new, keeping a single date that works for your budget is more important than trying to “beat” the market.

4. Using STP (Systematic Transfer Plan)

Investors who want to move money gradually from one fund to another can use an STP. It allows you to transfer a fixed amount at regular intervals, helping reduce market timing risk and making it easier to manage investments across multiple funds. This strategy is more suitable for experienced investors rather than beginners.

5. Ease of Tracking

It is easier to track your SIP by choosing a fixed and easy-to-remember date (your birthday, salary date, or the 1st of the month); it is harder when the date is random. You can also align SIP dates with EMIs or bills for better cash flow, and plan a SWP (Systematic Withdrawal Plan) to withdraw fixed amounts periodically from your investments.

SIP Dates Offered by Top Mutual Fund Houses

Many fund houses provide flexible SIP date options, allowing selection based on convenience cash flow, and SIP frequency options (daily, weekly, monthly, quarterly – currently partial). The table below, based on guidelines from AMFI (Association of Mutual Funds in India), highlights common choices across leading AMCs, helping identify which date is best for SIP:

Fund HouseCommon SIP Dates Offered
SBI Mutual Fund1st, 5th, 10th, 15th, 20th, 25th
HDFC Mutual Fund1st to 28th (any date)
Axis Mutual Fund1st, 7th, 10th, 15th, 25th
ICICI Prudential1st, 7th, 10th, 15th, 20th, 25th
Nippon India Mutual1st to 28th (multiple options)

How to Choose the Right SIP Date?

When selecting a SIP date, it is best to align it with the salary credit date. This helps maintain smooth cash flow and reduces the risk of insufficient balance. Avoid dates that fall close to major financial commitments such as EMIs or credit card due dates. Choosing a date that is easy to remember will make it simpler to track investments. Most importantly, avoid overthinking the choice, as consistency in investing is far more important than the exact date. For new investors exploring the best SIP date for mutual fund investments, starting with a monthly SIP can be a practical and manageable option.

*Disclaimer: This blog is for educational purposes only and does not constitute financial advice. Please consult a registered financial advisor before making any investment decisions.

FAQs

What is the right time for a SIP?

There’s no perfect time to start a SIP. The earlier the better. SIPs are more effective in the long run because of a regular investment that does not depend on market fluctuations. The earlier, the better, since your money has a longer time to grow with the use of compounding.

Which SIP is better, weekly or monthly?

Both have their advantages. SIPs that can be paid on a monthly basis are more popular and simpler for their salaried users. Weekly SIPs can help in capturing more price movement, but they need continuous tracking and greater effort. Monthly SIPs are more convenient and suitable in the case of most beginners.

Which date is best for SIP?

There is no specific date that guarantees higher returns. Choose a date that aligns with your salary or cash flow for convenience and smooth payments.

What if the SIP date is a holiday?

If the SIP date falls on a bank holiday, the transaction is usually processed on the next working day automatically.

Can I change my SIP date later?

Yes, most mutual fund platforms allow you to change your SIP date. However, it may take one or two cycles to reflect the change.

What if I miss an SIP?

If you miss an SIP due to insufficient balance or any other reason, the payment is skipped. Your SIP continues automatically in the next cycle and you can invest the missed amount later as a top-up or separate investment.

The Role of Fixed Deposits in a Diversified Investment Portfolio

When it comes to investing, the golden rule is diversification. A well-diversified investment portfolio ensures that your money is spread across different asset classes, balancing growth with stability.

While equities and mutual funds aim to deliver higher returns, Fixed Deposits (FDs) play a stabilising role by offering capital protection, assured returns and liquidity. This blog explores the role of FDs in a diversified investment portfolio, their advantages and how much of your portfolio should ideally include them.

What is a Diversified Investment Portfolio?

Diversification, also known as asset allocation, helps reduce overall risk because different investments react differently to market conditions. For instance, while stock markets may fall, FDs continue to provide steady returns, helping you achieve risk-adjusted performance.

A well-diversified investment portfolio typically includes:

  • Equities & Mutual Funds: Provide long-term capital appreciation by investing in businesses; higher risk but potential for significant returns.
  • Debt Instruments: Offer predictable income with lower risk, making them suitable for conservative investors.
  • Gold or Commodities: Hedge against inflation and economic uncertainty, preserving purchasing power during volatile times.
  • Fixed Deposits (FDs): Ensure capital safety with guaranteed returns, flexible tenures, and predictable cash flows.
  • Real Estate & Alternatives: Build wealth through property appreciation or other alternative assets, though requiring larger investments and longer holding periods.

Are Fixed Deposits Considered Investments?

Yes, Fixed Deposits are considered investments, though they fall under the low-risk, fixed-income category. When you invest in an FD, you’re choosing safety and predictability.

Key features that make FDs an important investment avenue include:

  • Capital Protection: Your principal remains secure, unaffected by market swings.
  • Assured Returns: Interest rates are locked at the time of booking, ensuring predictable growth.
  • Flexible Tenure: Ranging from 7 days to 10 years, aligning with varied goals.
  • Liquidity: Premature withdrawals are allowed with minor penalties, useful for emergencies.
  • Tax Benefits: 5-year tax-saving FDs are eligible for deductions under Section 80C.
  • Insurance Safety Net: Bank FDs are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh per depositor.
  • Senior Citizen Benefits: Extra interest rates for senior citizens, making them ideal for retirement income.
  • TDS on Interest: FD interest above the threshold is subject to Tax Deducted at Source (TDS), which should be factored into net returns.

Why Fixed Deposits Matter in a Diversified Portfolio

For investors with low to moderate risk appetite, FDs bring capital preservation and steady cash flows to the table. Here’s why they matter:

  • Risk Reduction: Shield your money from stock market volatility and economic downturns.
  • Predictable Income: Monthly or quarterly payouts provide reliable cash flow for expenses or reinvestment.
  • Liquidity Management: Short-term FDs and sweep-in options ensure funds are available during emergencies.
  • Goal Planning: Perfect for short- to medium-term goals such as weddings, education or travel.
  • Portfolio Balance: Act as a stabiliser, offsetting risks from equities and other growth-driven assets.

What is the 5% Rule for Diversification?

The 5% rule suggests you shouldn’t allocate more than 5% of your portfolio to a single high-risk asset class, such as speculative equities or alternative assets. While this rule isn’t directly applicable to FDs, it highlights the importance of balance.

At the same time, over-allocating to FDs may limit your portfolio’s growth potential, since FD interest rates are generally lower than equity or mutual fund returns. A disciplined approach with portfolio rebalancing ensures you maintain both safety and growth.

How Much of a Portfolio Should Be FD?

There’s no one-size-fits-all. Your FD allocation depends on age, risk appetite and financial goals:

  • Young investors (20s–30s): 10–20% in FDs to cover emergencies while focusing on equities for long-term wealth.
  • Mid-career professionals (30s–50s): 20–30% in FDs to balance safety with steady growth.
  • Retirees (50+): 40–60% in FDs to preserve retirement corpus and ensure a predictable income.

Fixed Deposits vs Other Investments

Here’s a comparison between fixed deposits and other investment types:

Investment OptionRisk LevelReturn PotentialLiquidityBest For
EquitiesHighHighModerateLong-term wealth creation
Mutual FundsModerateModerate–HighModerateBalanced growth
GoldLow–MediumLow–ModerateHighInflation hedge
Real EstateModerateModerate–HighLowLong-term asset building
Fixed Deposits (FDs)Very LowLow–ModerateHighCapital safety & predictable income
Corporate FDsLow–ModerateModerateModerateHigher returns with slightly higher risk
Tax-saving FDsVery LowLow–ModerateLow (5-year lock-in)Tax benefits under Section 80C

Conclusion

A diversified investment portfolio is about balancing growth with safety. While equities and mutual funds drive long-term wealth, Fixed Deposits ensure security, liquidity and steady income. With Fibe’s digital FD platform, investors can book FDs seamlessly with leading banks and NBFCs, making it easier to combine convenience with financial discipline.

FDs may not deliver the highest returns, but they provide the stability that allows the rest of your portfolio to perform. Fibe further enhances this by offering quick booking, flexible tenures, and competitive interest rates, helping you align your FD strategy with your financial goals. Download the app now!

FAQs

Are fixed deposits considered investments?

Yes, Fixed Deposits are low-risk investments that provide guaranteed returns, capital safety and are insured by DICGC up to ₹5 lakh.

What is the 5% rule for diversification?

The 5% rule suggests not investing more than 5% of your portfolio in any high-risk asset, ensuring balanced exposure.

How much of a portfolio should be FD?

It varies with age and goals—10–20% for young investors, 20–30% for mid-career and 40–60% for retirees.

Everything You Need to Know About Current Account UPI

UPI has changed the way we pay and receive money. It is quick, easy and safe. Most people know UPI works with savings accounts. But what about businesses that use current accounts? Many business owners ask if UPI can be linked with a current account. The answer is yes. 

For business owners, having a current account UPI is very useful. It helps them collect payments and manage transactions without relying only on card machines or cash.

Read on to explore more about how the current account UPI works, why it is useful for businesses and what limits apply.

What is UPI

UPI stands for Unified Payments Interface. It is a system that lets you transfer money instantly between bank accounts. All you need is a mobile number or UPI ID. You don’t have to enter account numbers or IFSC codes every time. It works 24/7, including weekends and holidays. You can use it to send or receive money, pay bills or even make purchases online and offline.

UPI is regulated by the National Payments Corporation of India (NPCI), which ensures security and standardisation. It supports multiple banks on a single app, making it easy for both individuals and businesses to manage transactions in one place.

Can UPI Be Linked to a Current Account

Yes, UPI can be linked to a current account. Just like a savings account, a business current account can also be connected with UPI apps. This lets you send and receive payments directly from your current account.

UPI is very useful for small and medium businesses that handle frequent, smaller payments. Unlike Point of Sale (POS) machines where you wait for settlement, UPI credits money instantly. This keeps cash flow smooth and improves liquidity.

Why Businesses Should Use Current Account UPI

If you run a business, having UPI linked to your current account offers many advantages. Here are some reasons why:

  • Instant payments: Customers can pay you in seconds with no delays
  • Low cost: Unlike card machines, UPI does not come with high transaction charges
  • Cashless convenience: Payments go straight to your bank account
  • Better tracking: All UPI payments reflect in your account statement, making it easy to track income
  • Customer preference: UPI is now the default way to pay for many customers

How to Set Up UPI for a Current Account

Setting up UPI for your current account is simple. Here are the steps:

  • Download a UPI app of your choice
  • Register with your mobile number linked to your current account
  • Select your bank and verify using OTP
  • Create your UPI PIN
  • Start making and receiving payments from your current account

It takes only a few minutes to get started. Once linked, you can use it just like you do with a savings account.

Banks may ask for extra KYC before linking UPI to a current account. Keep your mobile number updated since OTPs are needed for setup.

Benefits of Using UPI with a Current Account

Here’s why using UPI with a current account is beneficial:

  • Ease of use: Payments can be made with just a UPI ID or QR code
  • Speed: Transactions happen instantly, even on weekends and holidays
  • Safety: Every transaction is protected by your UPI PIN
  • Business efficiency: Faster collections mean better cash flow for your business
  • Simpler reconciliation: All payments reflect in one bank statement, reducing errors and saving time

UPI Transaction Limits for Current Accounts

UPI comes with set limits that can differ by bank. For most users, the daily limit is up to ₹1 lakh. Some transactions, like insurance, capital markets or inward remittances allow up to ₹2 lakh. For IPOs and RBI’s Retail Direct Scheme, the limit goes up to ₹5 lakh. Many banks have extended these higher limits to the current accounts of verified businesses, giving them more room for larger payments.

UPI Apps Without Bank Account

To use UPI, you must link a bank account. However, prepaid wallets and some apps may allow limited transactions. But they are not the same as UPI.

So, if you come across claims of UPI apps without bank account, know that they are either wallets or payment gateways. 

Key Points to Remember About UPI for Current Account

  • You can link UPI with a current account
  • It is very useful for businesses to collect customer payments
  • Limits exist, but some banks allow higher limits for current accounts
  • Claims of UPI apps without bank account can be misleading, as UPI requires a linked bank account

UPI is no longer limited to savings accounts. Businesses with current accounts can also enjoy their benefits. With quick, low-cost and secure payments, it is one of the best ways to manage transactions.

If you are a business owner, enabling UPI on your current account not only makes collections easier but also positions your business as digital-first. With more customers expecting QR codes and UPI IDs, it’s no longer optional, it’s essential.

And if you want a smarter way to manage your spends, the Fibe Axis Bank Credit Card can be a good fit. It has 0 joining fees and gives you rewards on everyday categories like food, travel and entertainment. It works well alongside your UPI payments, helping you save more while you spend! Download the Fibe App today to get started!

FAQs on UPI for Current Account

Can UPI be used for a current account?

Yes, UPI can be linked to current accounts. It helps businesses collect and send payments directly from their account.

Is there a UPI limit for current accounts?

Yes, most banks set a daily limit of ₹1 lakh. Some banks may allow up to ₹2 lakh or higher for current accounts.

Can UPI replace POS machines for businesses?

For small and medium transactions, yes. UPI is faster and cheaper. But for very large-ticket sales, POS or bank transfers may still be required.

UPI PIN vs ATM PIN: Are They the Same? Key Differences Explained

No, the UPI PIN and the ATM PIN are not the same thing. The ATM PIN is connected to your debit card. You use it for things like taking out cash from an ATM, checking your balance and making payments with your card. The UPI PIN is used to confirm transactions on your mobile payment apps like PhonePe Google Pay, Paytm and BHIM. 

Both the UPI PIN and the ATM PIN help keep your money safe. They work in different ways and in different places. The UPI system is a way to send money instantly. It was made by the NPCI. Is regulated by the RBI. This means you can send money to someone Bank account right away. 

If you know the difference between the ATM PIN and the UPI PIN, you will not get confused. You can do your transactions safely. You will be less likely to get cheated. 

What is an ATM PIN? 

The ATM PIN is short, for Automated Teller Machine Personal Identification Number. It is a code that is 4 or 6 digits long. The bank uses this code to make sure that the person using the debit card is really the owner of the card. 

The ATM PIN is connected to your debit card. So, you need to enter it when you use your card at an ATM. You also need to enter it when you use your card to make a payment at a store. 

For example, when you want to take out cash from an ATM you put your debit card in the machine. Enter your ATM PIN. The bank checks the PIN. Then lets you take out the cash. It is the same when you use your debit card to buy something at a store. The machine will ask for your ATM PIN before it says the payment is okay. 

How an ATM PIN Works in Practice 

Here’s how it usually works: 

  1. You insert or tap your debit card at an ATM or POS machine. 
  1. The machine asks you to enter your ATM PIN. 
  1. Your bank verifies the PIN. 
  1. If the PIN is correct, the transaction is approved. 

In simple words, your ATM PIN acts like a key for your debit card. Without it, most cash withdrawals and debit card transactions cannot be completed. 

What is a UPI PIN?  

A UPI PIN is like a code. It means Unified Payments Interface Personal Identification Number. You create it when you start using UPI on a payment app. It is usually 4 or 6 numbers. Some people call a UPI PIN an MPIN or Mobile PIN. You use it to approve transactions on your phone and need to enter your UPI PIN to send money. It is also needed when you are paying a merchant. You need it to complete a UPI transaction with your UPI PIN. The NPCI says UPI is a system for money transfers, between bank accounts using your mobile phone. It uses mobile-based payment infrastructure. 

How a UPI PIN Works in Practice 

Suppose you are paying your friend back for dinner through Google Pay or scanning a QR code at a tea stall. Once you enter the amount and confirm the payment, the app asks for your UPI PIN. 

After you enter the correct UPI PIN: 

  • Your bank verifies the request 
  • The money is debited from your bank account 
  • The receiver gets the payment almost instantly 

Unlike an ATM PIN, a UPI PIN is not used for withdrawing cash from a regular ATM. It is meant for digital and app-based payments. 

Is UPI PIN and ATM PIN the Same? 

No, UPI PIN and ATM PIN are not the same. They may look similar because both are secret numeric codes, but they are used for different purposes. An ATM PIN is connected to your debit card and is used mainly for ATM withdrawals, balance enquiries and card-based payments. A UPI PIN is connected to your UPI-enabled bank account on a mobile app and is used to approve digital payments. 

Think of it this way: your ATM PIN protects your debit card transactions, while your UPI PIN protects your mobile payment transactions. Both help verify your identity before money moves out of your account, but one works in a card-based setup and the other works in a mobile-first digital payment setup. 

For example, if you withdraw ₹2,000 from an ATM, you use your ATM PIN. But if you send ₹2,000 to a friend using PhonePe or Google Pay, you use your UPI PIN. 

Why ATM PIN and UPI PIN Are Important 

Both ATM PIN and UPI PIN are important for banking security. They help make sure that only the authorised user can complete a transaction. 

The RBI has repeatedly advised users not to share sensitive banking details such as ATM/card details, passwords, PINs, OTPs, CVV and UPI PINs with anyone. It also advises users to avoid financial transactions on public or open Wi-Fi networks. 

Both PINs matter because they: 

  • Verify your identity before a transaction is approved 
  • Protect your bank account from unauthorised access 
  • Add a security layer for both offline and online payments 
  • Reduce misuse if your card or phone falls into the wrong hands 
  • Build confidence while using ATMs, debit cards and UPI apps 

As a simple rule, treat both PINs like your house key. You may use them in different places, but both protect something valuable. 

Key Differences Between UPI PIN and ATM PIN 

While both PINs protect your money, they differ in where they are used, how they are created and what type of transactions they approve. 

Feature ATM PIN UPI PIN 
Use Used for debit card transactions such as ATM withdrawals, balance checks and card payments Used for UPI app transactions such as money transfers, QR payments and online payments 
Linked to Debit card UPI-linked bank account on a mobile app 
Who sets it Usually issued or generated through the bank, ATM or banking channels Created by you while registering for UPI on a payment app 
Security scope Protects physical debit card-based transactions Protects app-based and mobile payment transactions 
Transaction type Mostly offline and card-based transactions, such as ATMs and POS machines; may also support debit card online payments Primarily online, mobile and QR-based transactions 
How to change Through an ATM, net banking, mobile banking or bank customer service Directly through your UPI app using debit card details or other bank-supported verification methods 
Example Withdrawing cash from an ATM Paying a shopkeeper by scanning a QR code 

UPI PINs are designed for digital payments, while ATM PINs are designed for debit card access and card-based banking. 

How to Set or Change Your ATM PIN and UPI PIN 

How to Set or Change Your ATM PIN 

You can usually set or change your ATM PIN through: 

  • ATM machine: Insert your debit card, choose the PIN generation or change PIN option and follow the instructions. 
  • Mobile banking app: Some banks allow debit card PIN generation from the card section of their mobile app. 
  • Net banking: Log in to your bank account online and look for debit card services. 
  • Bank branch or customer support: Some banks may help you regenerate your PIN through official banking channels. 

Keep your registered mobile number active because banks may send an OTP for verification. 

How to Set or Change Your UPI PIN 

You can usually set or change your UPI PIN through your preferred UPI app: 

  • Open your UPI app and go to the bank account section. 
  • Select the account for which you want to set or reset the UPI PIN. 
  • Choose Set UPI PIN, Change UPI PIN or Forgot UPI PIN. 
  • Enter the required debit card details or follow the bank-approved verification method. 
  • Verify using OTP or other required authentication. 
  • Create your new UPI PIN. 

Some platforms and banks may support newer verification methods for UPI PIN setup or reset, but availability can vary depending on the bank and app. 

Steps to Stay Safe While Using PINs 

PIN safety is one of the simplest ways to protect your bank account. Here are some practical personal finance tips: 

1. Never Share Your PIN 

Do not share your ATM PIN, UPI PIN, OTP, CVV or password with anyone. Banks, RBI, NPCI and legitimate payment apps do not ask for your PIN over calls, messages or emails. 

2. Avoid Easy-to-Guess Numbers 

Do not use simple combinations such as: 

  • 1234 
  • 0000 
  • Your birth year 
  • Your phone number 
  • Repeated digits such as 1111 

Choose a PIN that is easy for you to remember but difficult for others to guess. 

3. Keep ATM PIN and UPI PIN Different 

Using the same number for both may feel convenient, but it increases risk. If one PIN is compromised, the other may also become vulnerable. 

4. Change PINs Periodically 

Update your ATM PIN and UPI PIN from time to time, especially if: 

  • You used your card at an unfamiliar ATM 
  • You suspect someone saw your PIN 
  • You lost your phone or debit card 
  • You received suspicious banking messages 

5. Use Only Trusted Apps and Machines 

Enter your UPI PIN only on trusted payment apps. Similarly, use ATMs in safe locations and check for suspicious devices attached to the card slot or keypad. 

6. Do Not Enter UPI PIN to Receive Money 

You do not need to enter your UPI PIN to receive money. If someone asks you to enter your UPI PIN to “accept” money, it could be a scam. 

7. Turn On Transaction Alerts 

Enable SMS, email or app notifications for your bank account. This helps you spot unauthorised transactions quickly. 

8. Avoid Public Wi-Fi for Banking 

Avoid making UPI or banking transactions on public Wi-Fi. RBI also advises users to avoid financial transactions through public, open or free Wi-Fi networks. 

9. Lock Your Phone and Payment Apps 

Use a screen lock, fingerprint, face unlock or app lock. This adds another layer of protection if your phone is lost or stolen. 

10. Report Suspicious Activity Immediately 

If you notice an unknown ATM withdrawal, UPI debit or card payment, contact your bank immediately and block the card or account access if required. 

Following these steps can help keep your money safer across both offline and online banking channels. 

The Bottom Line 

So, is UPI PIN and ATM PIN the same? No. An ATM PIN is used for debit card-based transactions such as ATM withdrawals and card payments. A UPI PIN is used for mobile-based digital payments through UPI apps. 

Both PINs play an important role in protecting your money. The safer approach is to keep them different, never share them and use them only on trusted platforms. 

And if you’re looking for a smarter way to spend digitally, the Fibe Axis Bank Credit Card can be a useful option. It comes with no joining or annual fees and offers 3% cashback on food delivery, entertainment and local commute, along with a numberless card design for enhanced security.  

FAQs on UPI PIN vs ATM PIN 

1. Are my UPI PIN and ATM PIN the same? 

No, they are different. An ATM PIN is used for debit card-based transactions such as ATM withdrawals and card payments. A UPI PIN is used to approve payments through UPI apps. 

2. Can we set UPI PIN without ATM PIN? 

In many cases, you need your debit card details to set or reset your UPI PIN. Some banks and apps may support alternate verification methods, but availability can vary. Always follow the process shown in your official UPI app. 

3. What should I do if I forget my UPI PIN? 

You can reset it from your UPI app. Go to your linked bank account, select Forgot UPI PIN or Reset UPI PIN, verify your details and create a new PIN. 

4. Can I use the same number for ATM PIN and UPI PIN? 

It is not recommended. Using different PINs improves banking security and reduces the impact if one PIN is compromised. 

5. Do UPI PINs and ATM PINs serve the same purpose? 

They serve a similar security purpose, but in different ways. Both verify your identity before a transaction, but an ATM PIN is used for debit card transactions, while a UPI PIN is used for mobile-based UPI payments. 

6. What should I do if I suspect fraudulent activity involving my UPI or ATM PIN? 

Immediately contact your bank, block your debit card if needed, change your PINs and report the suspicious transaction through official banking channels. Also check your recent transactions and enable alerts if they are not already active. 

7. Is it safe to use the same number for UPI PIN and ATM PIN? 

No, it is safer to keep them different. If one PIN gets exposed, having a separate PIN for the other payment method can help reduce risk. 

Everything You Need to Know About UPI Dispute Redressal Mechanism

UPI has made payments fast and simple. But like any system, errors can happen. You might send money to the wrong account, face a failed debit or not receive a refund on time. That’s where the UPI dispute redressal mechanism comes in. It helps users raise complaints, track them and get quick solutions.

Read on to understand how the UPI dispute redressal mechanism works and the key timelines. You will also know your rights and the simple steps to follow if your money gets stuck.

Common Reasons for a UPI Wrong Transaction Complaint

Most disputes occur because of:

  • Wrong UPI ID entry while sending money
  • Delays in settlement due to technical errors
  • Double debits during failed transactions
  • Non-refund of failed or pending payments
  • Payments stuck during peak hours due to server congestion
  • Merchant not delivering goods or services after successful payment

These are common issues that almost every user may face at some point. The good news is that there is a clear UPI dispute redressal mechanism to fix them.

Role of NPCI in the Dispute Redressal Process

The National Payments Corporation of India (NPCI) runs the UPI platform and ensures safe and seamless digital payments across the country. To handle issues it has set up ‘UPI Help’, also known as the NPCI dispute redressal mechanism. This is the official UPI dispute redressal mechanism. It tracks every complaint until closure. NPCI also studies dispute data to improve efficiency and reduce repeat problems.

This platform connects banks and payment service providers. They can log complaints, track updates and resolve them within fixed timelines. In short, NPCI makes sure your issue is not ignored. Banks must act on it and keep you informed. This makes the process simple and accountable.

The UPI Dispute Redressal Mechanism

The UPI dispute redressal mechanism follows a step-by-step structure:

  • First level: You raise a complaint with your UPI app or bank
  • Second level: If not resolved, it goes to the bank that manages the receiver’s account
  • Third level: If both banks cannot close the case, NPCI steps in through the official NPCI redressal platform
  • Final escalation: If NPCI is unable to resolve, you can approach the RBI Ombudsman under the Digital Transactions Scheme

This layered system ensures that there is a chain of responsibility. Your issue is reviewed at multiple levels before closure.

Why the UPI Dispute Redressal Mechanism Matters

Without a formal mechanism, users would be left waiting endlessly for refunds. With the system in place, there are clear benefits:

  • Transparency in how complaints are handled
  • Defined timelines for banks and apps
  • Accountability for all parties involved
  • Protection for users in case of failed or wrong payments
  • Same process across all UPI apps so it stays fair for everyone
  • Builds trust and supports India’s move towards a cashless economy

How to File a UPI Wrong Transaction Complaint

Here’s how you can raise a complaint if your money is stuck or sent to the wrong account:

  • Open your UPI app and check the transaction status under ‘History’
  • If the status shows failed but money is debited, tap ‘Raise Complaint’
  • Enter details of the UPI wrong transaction complaint and submit
  • Your bank will review and respond, usually within 3 working days
  • If the issue is not fixed, escalate it to NPCI through their grievance portal

This process ensures that your complaint is properly recorded and tracked. Also, always keep screenshots and transaction IDs handy. Banks may ask for proof during resolution

Timelines for Resolution

As per the RBI and NPCI dispute redressal mechanism rules:

  • Failed transactions should be reversed within T+1 working day (transaction day plus one)
  • In most cases, refunds reflect in your account within 3 to 5 working days, but timelines may vary by bank
  • Complaints must be resolved within 30 days from the date of issue raised
  • If not resolved within this period, you can approach the RBI Ombudsman for Digital Transactions
  • If the receiver refuses to return wrongly transferred funds, legal steps may be required. This is because banks cannot debit accounts without consent

These timelines make the NPCI redressal process structured and time-bound. They also give users a clear idea of when to expect resolution.

Money glitches can be stressful, especially when a UPI refund takes time under the dispute redressal mechanism. Having a fallback option ensures your daily expenses are never disrupted. With Fibe, you can get an Instant Cash Loan Online in just 2 minutes! 

You get repayment options from 6 to 36 months with no collateral needed. A quick one-time application gives you access to credit anytime. This way your finances stay on track while the dispute gets resolved. Download the Fibe App today for instant access to funds!

FAQs

How do I report a wrong transaction?

You can report it directly on your UPI app under ‘Transaction History’. Select the payment, choose ‘Raise Complaint’, and submit. If not resolved, escalate to your bank, then to NPCI and finally to RBI Ombudsman if needed.

How can I reverse money sent to a wrong account?

If you enter a wrong UPI ID, raise a UPI wrong transaction complaint on your app right away. The bank will try to recover funds, but refunds need the receiver’s consent. This is why it’s always best to double-check the UPI ID before paying.

What if my complaint is closed but the issue is not resolved?

In that case, you can reopen the complaint through your UPI app or escalate directly to NPCI. If the response is still unsatisfactory, you can file a grievance with the RBI Ombudsman.

Is MPIN and UPI PIN Same or Different? Here’s What You Need to Know

In digital banking, PINs protect your money. But many people get confused by the different types of PINs. A common question is – ‘is MPIN and UPI PIN same?’ At first, they look alike. Both are 4 or 6-digit codes you must enter to approve payments. But they are not the same. They may sound similar, but they work in different ways. Each one is meant for a different purpose. 

Keep reading to know where each PIN is used and the difference between UPI PIN and MPIN. You will also see why it’s important not to mix them up. By the end, you’ll know exactly which PIN to use when.

What is an MPIN?

MPIN stands for Mobile Personal Identification Number. It works like a password for your bank’s mobile app. Banks provide or allow you to set an MPIN when you start using mobile banking.

Key points about MPIN:

  • Used only for mobile banking apps from banks
  • Need to log in and approve payments inside the mobile app
  • Usually 4 or 6 digits long
  • Issued and managed by the bank

MPIN is part of RBI’s mobile banking security system. It makes sure no one can access your account without proper authentication, even if they have your phone.

What is a UPI PIN?

A UPI PIN is a code you create while setting up your UPI app. It is used only for UPI payments and not for your bank’s mobile app. Without entering this PIN, your UPI payment will not go through.

Key points about UPI PIN:

  • Works only on UPI apps like PhonePe, Google Pay or BHIM
  • Needed every time you send money through UPI
  • Can be created, changed or reset within the UPI app
  • Separate from your bank’s mobile app

Your UPI PIN links directly to your debit card and bank account. When you set it up, the app verifies your card details before letting you create the PIN.

Is MPIN and UPI PIN Same?

No, there is a difference between MPIN and UPI PIN. Both are security codes, but they work in different places. MPIN is only for bank mobile apps. The UPI PIN is only for UPI apps. If you accidentally mix them, it can lead to failed transactions or security problems. That’s why banks keep them separate.

Difference Between UPI PIN and MPIN

Here’s how they differ:

FactorMPINUPI PIN
PlatformSecures bank mobile appsSecures UPI apps
SetupIssued by banksCreated in UPI apps
UsageUsed to log in and approve payments in mobile bankingUsed to send money via UPI
ScopeDoes not work in UPI appsDoes not work in mobile banking apps
ExpirySome banks ask for a reset after long periods of inactivityStays valid until you reset it yourself

Why Both PINs are Important?

Both MPIN and UPI PIN protect your money.

  • MPIN keeps your mobile banking app secure
  • UPI PIN blocks unauthorised UPI payments even if someone has your phone

Together, they create double protection. Even if one system fails, the other still guards your account.

Common Mistakes People Make

Many people wonder is MPIN and UPI PIN same, but that’s only one part of the confusion. It often leads to other common mistakes too, like:

  • Entering MPIN in a UPI app or UPI PIN in a mobile banking app
  • Thinking ATM PIN, MPIN and UPI PIN are the same
  • Using the same digits for all PINs
  • Writing PINs on paper or saving them in phone notes
  • Sharing PINs with others for quick help during payments
  • Setting very easy numbers like 1234 or your date of birth, making it simple to guess

Avoiding these mistakes keeps your banking experience smooth and secure.

How to Set and Reset These PINs?

Here is how you can set or reset them:

  • For MPIN: You can easily set it while activating mobile banking. In case you forget your MPIN, reset it through your bank’s app, net banking or branch. An MPIN reset may sometimes need a branch visit or OTP verification.
  • For UPI PIN: You create it when you first link your account in a UPI app. If you forget your UPI PIN, you can reset it in the UPI app itself. All you have to do is verify your debit card details. Most UPI apps allow self-reset. 

Safety Tips for PINs

  • Never share your PINs
  • Avoid simple numbers like 1234 or your birth year
  • Change your PIN if you feel it is known to others
  • Keep MPIN and UPI PIN different to avoid mix-ups
  • Update PINs every few months as a habit

Also, avoid writing them down or saving them in notes apps, which can be hacked. These steps make sure your transactions remain safe.

Many people think MPIN and UPI PIN are the same. In reality, they are not. MPIN is linked to mobile banking apps. UPI PIN is linked to UPI payments. Both have their own role and both should be kept private. Knowing the difference between MPIN and UPI PIN helps you avoid errors and keeps your money safe.

For payments that are not just safe but also rewarding, try the Fibe Axis Bank Credit Card. There are no joining or annual fees. You also earn cashback of up to 3% on food delivery, entertainment and daily commutes. It makes everyday spending smarter!

FAQs on MPIN and UPI PIN

Are MPIN and ATM PIN the same?

No. An ATM PIN is used for withdrawing cash or swiping your card. MPIN is only for mobile banking apps.

How to change MPIN for UPI?

You cannot. UPI works only with UPI PIN. To change it, open your UPI app, select your bank account and reset your UPI PIN.

Can one bank account have multiple UPI PINs?

No. Each account is linked to just one UPI PIN. Even if you use the same account on different apps, you’ll need to enter the same PIN every time.

What happens if I enter the wrong PIN multiple times?

If you enter the wrong UPI PIN more than a few times, your account gets blocked for security. You’ll have to reset the PIN through your app to use it again.

How to Make Offline UPI Payments Easily in India?

UPI makes paying quick and easy. But what if your internet is not working? That is where offline UPI payments help. You can send money, check your balance or make purchases without mobile data or Wi‑Fi. This method works on both smartphones and basic phones. It uses the *99# USSD code to connect to your bank through the UPI system. It is simple, safe and works even in low-network areas.

What are Offline UPI Payments?

Offline UPI payments are digital transactions you make without internet access. Instead of opening a UPI app, you dial *99# from your phone. This connects to your bank using the National Payments Corporation of India’s secure USSD-based service.
You can send or request money, check balances or view recent transactions. The service works with all Global System for Mobile Communication (GSM) networks and most banks in India. Here, every payment is verified using your UPI PIN.

Offline UPI Payment Options

Here is how different UPI offline payments compare. They are a smart choice when you are wondering how to pay without internet in places with weak or no network.

MethodDevice neededInternetLimitBest for
*99# USSDAny GSM phoneNo₹5,000 per transactionGeneral use in low network areas
UPI LiteSmartphoneSometimes₹500 per debit ₹2,000 walletSmall quick payments without PIN
UPI Lite XSmartphone with NFCNo₹500 per debit ₹2,000 walletTap to pay without data
UPI 123PAYFeature phoneNo₹5,000 per transactionVoice or IVR based payments

Background of Offline UPI Payment *99# Service

The UPI without internet *99# service started in November 2012 with MTNL and BSNL. In 2014 it expanded under the Pradhan Mantri Jan Dhan Yojana. So more users could send money without internet. 

UPI launched in August 2016 for smartphones. USSD 2.0 went live on 30 December 2016, so feature phones could use UPI payment without internet through *99#. Today *99# supports 13 languages and 83 banks. It is a simple option if you want to know how to send money without internet. 

Features of Offline UPI Payment *99# Service

  • Works on any GSM phone, including feature phones
  • Simple step-by-step menu that is easy to follow
  • Uses a signalling channel, so no internet is needed
  • Available 24×7 even on holidays
  • One common code *99# across operators
  • Your operator may charge a small USSD fee
  • Expands UPI offline payments access for users without smartphones or data

How to Enable UPI Without Internet?

Here’s what you need to do to enable offline UPI payments:

  • Dial *99# from your registered mobile number
  • Select your language
  • Choose your bank
  • Enter debit card details if asked
  • Set your UPI PIN if you do not have one

Once enabled, you can use it any time to make a UPI payment without internet. 

How to Send Money Through UPI Offline Payments? 

When you dial *99#, a menu will appear. You can choose either to ‘Send Money’, ‘Check Balance’ or ‘Request Money’ then follow the prompts. To send money without internet:

  • Dial *99#
  • Select ‘Send Money’
  • Choose mobile number, UPI ID or account number and IFSC 
  • Enter the details and amount
  • Confirm with your UPI PIN

The money is sent instantly and you see a confirmation message. This is the simple process of how to transfer money without internet while keeping your transaction secure.

Benefits of UPI Offline Payments

  • Works anywhere, even without mobile data
  • Supports all GSM phones
  • Secure since every payment is PIN-protected
  • No app needed
  • Quick and simple steps

Troubleshooting Common Offline UPI *99# Issues

  • Bank not listed: Sometimes your bank may not show up on the list. Try again after some time or set your UPI PIN in the BHIM app and then use *99# again
  • Connection error: Make sure you are using your registered SIM in slot 1 and move to a place with better signal
  • Wrong UPI PIN: Reset it through *99# or in the BHIM app
  • Menu not loading: Your mobile operator may not support *99#. Check with them to confirm

Safety Tips for UPI Without Internet

  • Use only your registered SIM
  • Never share your UPI PIN
  • Keep within the ₹5,000 per transaction limit
  • Be aware of possible USSD fees from your operator
  • Stay alert to fraud and never authorise unknown requests

Whether you are travelling or facing a short network issue, knowing how to do UPI payment without internet can make life simpler. Offline UPI payments are safe, quick and easy to set up. With options like *99#, UPI Lite, UPI Lite X and 123PAY, there is always a way to pay!

And if you want to make the most of your spends, get the Fibe Axis Bank Credit Card. No joining fee, no annual fee, plus cashback on food delivery, entertainment and local commutes! Pay online or tap and pay with ease and enjoy rewards every time you spend. Download the Fibe App to get started!

FAQs on Offline UPI Payments

Can I make an offline UPI payment?

Yes. You can use *99# to pay without internet on both smartphones and basic phones. It is quick, secure and works in most parts of India.

How to pay without UPI online?

Dial *99# from your registered mobile number. Select the payment option, enter the details and confirm with your UPI PIN. You can also try other offline methods like UPI Lite, UPI Lite X for tap and pay or UPI 123PAY for feature phone payments.

What is the process of offline payment?

Dial *99#, choose the service you need. Enter the recipient’s details, transfer amount then confirm with your UPI PIN. The payment is processed instantly and you will get a confirmation message.

What is the code to make UPI payment without internet?

*99# is the code you can use to make offline payments from your registered mobile number. All you have to do is dial the code and select ‘Send Money’, enter details and confirm with your UPI PIN.

What is the limit for offline UPI?

For *99#, it’s ₹5,000 per transaction. For UPI Lite/Lite X, it’s ₹500 per debit with a ₹2,000 wallet balance.

What Are ESG Funds & Should You Invest in Them?

Investors are getting more concerned about how well companies can operate beyond monetary rewards. Factors like environmental responsibility, ethical treatment of stakeholders, and corporate governance are becoming equally important. ESG funds also identify with this change of direction. Wondering “what is ESG invest?” These are funds that target companies that are in line with particular environmental, social, and governance criteria.

What Does ESG Stand For?

ESG stand for the three core pillars used to assess a company’s sustainability and ethical practices:

  • Environmental (E): Helps to gauge the impact of an organisation on the planet. These include analysing the overall carbon footprint, use of water, energy efficiency, management of waste and the prevention of climate change.
  • Social (S): It evaluates the manner in which an organisation treats employees, customers and society. The major aspects are diversity and inclusion, employee rights, product safety, data privacy and community engagement. It also looks at the overall impact a certain company can have on its community.
  • Governance (G): Focuses on ethical leadership, board Diversity, Equity and Inclusion (DEI), executive pay, fairness, pay parity, shareholder rights, transparent policies, and strict regulatory compliance.

What is an ESG Mutual Fund?

An ESG mutual fund invests in companies that meet defined environmental, social, and governance benchmarks. To classify a scheme as ESG, fund managers rely on third-party ESG rating providers, internal research and disclosures from companies. ESG scores are published by agencies like MSCI, Sustainalytics or Refinitiv and often guide these decisions.

In India, SEBI has issued specific guidelines:

  • Only equity schemes can be labelled ESG funds.
  • Schemes must clearly disclose their ESG strategy (exclusion, integration, best-in-class, impact investing, etc.).
  • Asset Management Companies (AMCs) must invest at least 80% of assets in ESG-compliant securities.
  • Fund houses are required to disclose the ESG rating provider and scoring methodology.

Global benchmarks such as the MSCI ESG Leaders Index are also used to track top-performing companies with robust ESG practices.

Types of ESG Funds

There are different types of ESG funds, each defined by its investment approach and selection criteria: 

  • Exclusionary or Negative Screening Funds: Avoid investing in industries considered harmful or controversial, such as tobacco, alcohol, gambling, weapons, or fossil fuels. This approach is also known as Socially Responsible Investing (SRI).
  • Positive Screening Funds: Invest in companies with the highest ESG ratings within their sector or region.
  • Best-in-Class Funds: Select top ESG performers even in industries with higher environmental or social impact, such as the most sustainable oil company.
  • Thematic ESG Funds: Focus on specific ESG-related themes like clean energy, water conservation, green technology, or gender equality.
  • Impact Investing Funds: Invest in projects or companies that create measurable positive outcomes for society or the environment, such as affordable housing or clean water initiatives, while also aiming for financial returns.

Green Bonds

Green bonds are fixed-income securities issued to finance eco-friendly projects such as renewable energy, sustainable agriculture, clean transportation, and pollution control. They attract investors seeking stable returns while contributing to climate goals, making them a popular tool in sustainable and responsible investing.

Climate Funds

Climate funds channel money into companies and projects that combat climate change. These include renewable energy, carbon reduction technologies, sustainable infrastructure, and climate-resilient businesses. For investors, climate funds offer exposure to growth sectors while supporting the global transition to a low-carbon economy.

Key Differences Between ESG Funds and Traditional Funds

The key differences between ESG funds and traditional funds can be understood through the following comparison:

AspectESG FundsTraditional Funds
Investment CriteriaFocus on companies with strong Environmental, Social, and Governance (ESG) practices in addition to profitability.Focus on profitability, past performance, and growth potential.
Risk ManagementIntegrate ESG practices to assess and mitigate risks impacting long-term business performance.Use conventional financial and market analysis methods to manage risk.
Financial PerformanceMay prioritise sustainability and long-term stability over short-term gains.Aim to maximise short-term and long-term financial returns for investors.
Societal ImpactDesigned to create a positive environmental and social impact through investments.Societal impact varies depending on the companies selected in the portfolio.

Should You Invest in ESG Funds?

Like any investment, ESG funds have their pros and cons. Here’s a balanced overview of pros and cons so that you can get to know them better:

Pros:

  • Alignment with ethical values: Enables investment in companies that uphold causes such as climate action, human rights, and corporate ethics.
  • Long-term stability: ESG-driven businesses are better positioned to avoid legal, financial, and reputational risks, supporting consistent performance over time.
  • Growing market appeal: With ESG assets projected to exceed $50 trillion in the coming years, sustainable investing is attracting a rapidly increasing investor base.

Cons:

  • Reduced diversification: Excluding certain industries can limit the range of investment opportunities.
  • Inconsistent ESG ratings: Variations in scoring methodologies may result in differing evaluations of the same company.
  • Variable performance: ESG funds may underperform at times due to a narrower stock universe or sector-specific exposure.

The Future of ESG Investing in India

India is witnessing the rapid adoption of ESG investing, supported by SEBI’s BRSR (Business Responsibility and Sustainability Reporting) aimed at enhancing transparency among companies and mutual funds. Growing awareness, particularly among younger demographics such as Gen Z and Millennials, is driving demand for sustainable investment products. As a result, ESG mutual funds are evolving into mainstream investment options with strong growth potential rather than remaining a niche segment.

*Disclaimer: This blog is for educational purposes only and does not constitute financial advice. Please consult a registered financial advisor before making any investment decisions.

FAQs

Are ESG Funds a Good Investment?

For long-term growth, ESG funds can be a strong investment choice, especially for aligning capital with specific ethical values. However, they are not immune to market risks. As with any mutual fund, returns depend on market conditions, fund strategy, and portfolio composition. Clear assessment of investment objectives, both in terms of risk tolerance and return expectations, is essential before selecting an ESG fund.

What Do ESG Funds Invest In?

ESG funds, regulated by SEBI and guided by global frameworks, invest in companies meeting environmental, social, and governance  standards. These include clean energy providers, ethical businesses, or tech firms with strong data privacy, while excluding industries like fossil fuels, tobacco, gambling, and weapons.

Is ESG investing tax-efficient in India?

Yes, ESG funds are taxed like equity mutual funds. STCG (within 1 year) is taxed at 15%, while LTCG (after 1 year, above ₹1.25 lakh exemption) is taxed at 10%. This makes ESG funds tax-efficient compared to many debt-oriented options. 

How do ESG funds perform compared to Nifty 50/Sensex?

Performance varies, but ESG funds often show resilience in market downturns due to quality-focused investing. However, they may underperform in rallies driven by excluded sectors like oil, tobacco, or defense. Several ESG funds also benchmark themselves against indices like the Nifty 100 ESG, which track companies meeting defined sustainability and governance standards

Are ESG funds good for SIP investors?

Yes. ESG funds suit SIP investors looking for long-term wealth creation with sustainable businesses. However, returns may fluctuate as the ESG theme is relatively new in India.

What are Thematic Mutual Funds: A Brief Guide

Some investors prefer a broad spread across the market. Others like the idea of putting their money where their beliefs are. Thematic mutual funds cater to that second group. These funds stick to one main idea and choose companies that align with it. The theme could be something vast, like clean energy or more specific, such as upgrading urban transport networks. No matter how wide or narrow the scope, the common link between all chosen investments is the underlying theme.

Understanding Thematic Funds Meaning

When people ask what is thematic fund, the easiest way to explain it is to picture a single investment basket. Everything inside it has a connection beyond profit-making; maybe it’s part of a social shift, a consumer habit or an industry transformation.
For example, a ‘digital economy’ theme could bring together IT firms, e-commerce platforms and fintech services. They may belong to different industries, but they all serve the same broader trend.

How They Differ from Sector Funds?

Thematic and sector funds are often mentioned in the same breath, yet they work differently.

FeatureThematic FundsSector Funds
ScopeMultiple industries linked to a single conceptOne industry only
ExampleA ‘Green India’ fund might include renewable energy, electric mobility and recycling companiesA pure energy sector fund that invests only in power companies
Risk LevelSpread within the theme, moderately highConcentrated risk, higher volatility


Thematic funds offer slightly more breathing space because they can draw from several industries within the same concept.

How Thematic Mutual Funds Work?

A thematic mutual fund usually goes through 4 steps:

  • Finding the theme: Fund managers pick an idea with strong long-term potential.
  • Selecting companies: Stocks are chosen if they fit the idea, regardless of sector.
  • Building the portfolio: Money is spread within the theme to keep risks balanced.
  • Keeping track: Holdings are reviewed regularly to see if they still suit the theme.

Examples of Common Themes

Indian investors have shown interest in several ideas:

  • Infrastructure growth: Construction, power, transport and allied services.
  • Sustainable energy: Solar, wind, biofuel and electric mobility.
  • Rising consumption: Businesses that benefit from higher household spending.
  • Tech innovation: IT services, fintech, automation and online marketplaces.

Why Investors Look at Thematic Mutual Funds?

  • Focused exposure: Lets you invest in areas you believe will grow.
  • Variety inside the theme: Covers more than one industry, even within a single idea.
  • Personal connection: Themes can reflect values, such as environmental care or digital progress.

Risks to Keep in Mind

  • Theme dependence: If the idea fades in relevance, performance can drop quickly.
  • Limited flexibility: Managers cannot freely move money outside the chosen concept.
  • Market timing matters: Entering at the wrong stage in the theme’s cycle can affect results.

Who Might Consider Thematic Mutual Funds?

They can suit people who already have a diversified core portfolio and want to add something targeted. They may also appeal to those willing to research and understand the chosen idea before committing money for several years.

Things to Check Before Investing

Before buying units of a thematic mutual fund, look at:

  • See if the theme has long-term growth potential in India.
  • Check the fund manager’s track record with similar funds.
  • Review the expense ratio and other related charges.
  • Ensure the fund is diversified and not concentrated in one area.

Thematic funds let you invest in ideas you believe in, add diversification, but shouldn’t replace your core portfolio.

If you need quick access to cash without selling your holdings, Fibe Loan Against Mutual Fund is worth considering. It allows you to borrow up to 80% of your mutual fund value for 6 months. You can only pay the interest as EMIs for what you use, helping you maintain your investments while meeting short-term needs.

FAQs on Thematic Mutual Funds

What is an example of a thematic fund?

A clean energy fund investing in solar panel producers, battery makers and wind turbine companies. They are from different industries but serve the same renewable energy goal.

Is it good to invest in thematic funds?

It depends on your comfort with theme-specific risks and your knowledge of the chosen idea. They can offer strong potential but are best as part of a balanced investment plan.