UPI Launches Pay With Mutual Fund Feature

• New Delhi, October 22, 2025 — India’s Unified Payments Interface (UPI) has introduced a groundbreaking feature — ‘Pay with Mutual Fund’ — enabling users to make real-time payments directly from their liquid mutual fund holdings . The feature, launched in collaboration with ICICI Prudential Mutual Fund , Bajaj Finserv AMC , and Curie Money , marks a global first in linking investment assets with day-to-day payments.

How It Works:

• The feature allows investors to use UPI for transactions by automatically redeeming liquid mutual fund units in the background. The redemption and payment occur instantly, removing the need to transfer money to a bank account first.

Key Benefits:

• Instant Liquidity: Payments are executed directly from mutual fund holdings in real time.

• Better Returns: Liquid funds offer 6–7% annualized returns , higher than typical savings accounts.

• Seamless UPI Integration: Investors can use their mutual fund investments like a digital payment wallet .

• Efficient Cash Management: Idle funds remain invested until needed for payments.

Important Considerations:
Experts advise users to remember that liquid funds are not insured like bank deposits and may face minor value fluctuations. Tax implications apply to redemptions, and cut-off timings could affect instant availability in some cases.

Related Facts:

• UPI, launched by NPCI in 2016 , now processes over 12 billion transactions monthly .

• Liquid mutual funds invest in treasury bills, commercial papers, and certificates of deposit .

• India is the first country to enable mutual fund-based real-time payments through UPI.

The ‘Pay with Mutual Fund’ feature combines investment growth with transactional convenience , signaling a major step in the evolution of India’s digital finance ecosystem.