There are two types of balances available to you Current Balance and Reserve Balance.

Current Balance🔗

After deduction of fees and tax, the payments received from your customers are added to your Merchant Balance or Current Balance. According to your settlement cycle, this accumulated amount is settled in your bank account.

The current balance is used to process refunds to your customer, settlements to your linked accounts, and chargebacks.
It is important for you to maintain a sufficient current balance. You can add funds to your current balance account from your Dashboard to ensure you have an adequate current balance for your business needs.
We do not charge any fee to process refunds. However, the fees and tax charged for processing the original transaction are not refunded when you process a customer refund. This amount is deducted from your current balance when you process your refund.

Add Funds to your Current Balance🔗

Watch this video to know how to add funds to your current balance.

To add funds to your current balance:

Log into the Razorpay Dashboard.
Navigate to My Account → Balances.
Click Add Funds in the Current Balance section and follow the on-screen instructions.

Handy Tips
When you add funds to your current balance, fees and tax are deducted and the remaining amount is added to your current balance. The fees and tax charged are the same as what is charged on payments received from customers.

For example, according to your pricing plan for a ₹1,000 payment, the fees and tax is ₹5. When you add ₹1,000 to your current balance, ₹5 (fees and tax) is deducted, and ₹995 is added to your current balance.

Example 1🔗

Let us say you have a current balance of ₹1,000.

	Current Balance
Opening balance	₹1,000
You receive and capture a payment of ₹1,000. Let us assume we charge a fee of ₹5 to process this transaction.	₹1995 (₹1,000 + (₹1,000 - ₹5))
You process a full refund of ₹1,000 for the above payment.	₹995 (₹1995 - ₹1,000)

Example 2🔗

Let us say you have a current balance of ₹0.

	Current Balance
Opening balance	₹0
You receive and capture a payment of ₹1,000. Let us say a fee of ₹5 is charged by us to process this transaction.	₹995 (₹0 + (₹1,000 - ₹5))
You try to process a full refund of ₹1,000 for the above payment.	The refund fails since you do not have a sufficient current balance.

Reserve Balance🔗

Reserve Balance allows you to process refunds or settlements to linked accounts even if you do not have a sufficient current balance. The amount you add as the reserve balance becomes the maximum negative limit for your account. Razorpay does not deduct funds from your reserve balance. It uses the reserve amount as a negative limit for your account balance.

Example 1🔗

If you add ₹1000 to your reserve balance, the negative limit of your account balance is automatically set at -1000. If you do not have a sufficient current balance, Razorpay will not fail your transactions until this limit is breached.

To increase your negative balance limit, you can add funds to your reserve balance from the Dashboard. You will have to transfer funds to your reserve balance only once in most cases.

Add Funds to your Reserve Balance🔗

You can add funds to Reserve Balance using the Razorpay Dashboard through either UPI or Bank Transfer.

Watch Out!
You should add funds only through the settlement account registered with us.

Watch this video on how to add Funds to your Reserve Balance.

Add Funds to your Reserve Balance through UPI🔗

Log into the Razorpay Dashboard.
Navigate to My Account → Balances.
Click Add Funds.
Select UPI.
Enter the description and amount to be added.
Click Add Credits.
Enter the email and contact number on the checkout pop-up page, select UPI, and complete the payment.

Your Reserve Balance is updated.

Handy Tips
It may take 2-3 hours for the Reserve Balance to reflect in your Razorpay Account.

Add Funds to your Reserve Balance through Bank Transfer🔗

Log into the Razorpay Dashboard.
Navigate to My Account → Balances.
Click Add Funds.
Select Bank Transfer.
Copy the account number and IFSC code.
Open your netbanking portal, create a beneficiary with these details and transfer the amount.

Handy Tips
It may take 2-3 hours for the Reserve Balance to reflect in your Razorpay Account.

Example of Current Balance and Reserve Balance🔗

Let us say you have a current balance of ₹0 and a reserve balance of ₹1,000

	Without Reserve Balance	With Reserve Balance
Opening Balance	Current Balance → ₹0 Reserve Balance → ₹0	Current Balance → ₹0 Reserve Balance → ₹1,000
You receive and capture payment of ₹1000. Let us say we charge a fee of ₹5 to process this transaction.	Current Balance → ₹995 Reserve Balance → ₹0	Current Balance → ₹995 Reserve Balance → ₹1,000
You process a full refund of ₹1000 for the above payment.	The refund fails since you do not have a sufficient current balance.	The refund is successfully processed. Current Balance → negative ₹5 Reserve Balance → ₹1,000

Balances