diff --git a/README.md b/README.md
index 3c02992..7cbffbd 100644
--- a/README.md
+++ b/README.md
@@ -113,6 +113,18 @@ JWT_SECRET=your-secret-key
 GEMINI_API_KEY=your-gemini-api-key
 ```
 
+For welcome email setup:
+```env
+SENDGRID_API_KEY=SG.your-sendgrid-api-key
+EMAIL_FROM="Paisable <no-reply@paisable.com>"
+
+EMAIL_USER=your@gmail.com
+EMAIL_PASS=your-app-password
+SMTP_HOST=smtp.gmail.com
+SMTP_PORT=587
+SMTP_SECURE=false
+```
+
 Start the backend:
 
 ```bash
diff --git a/backend/controllers/authController.js b/backend/controllers/authController.js
index f554875..00c2fc9 100644
--- a/backend/controllers/authController.js
+++ b/backend/controllers/authController.js
@@ -1,6 +1,7 @@
 const User = require('../models/User');
 const jwt = require('jsonwebtoken');
 const bcrypt = require('bcryptjs');
+const { sendWelcomeEmail } = require('../utils/sendEmail');
 
 // Function to generate JWT
 const generateToken = (id) => {
@@ -37,6 +38,13 @@ const signup = async (req, res) => {
         email: user.email,
         token: generateToken(user._id),
       });
+
+      // sends welcome email
+      sendWelcomeEmail(user.email, user.name || '')
+        .then(() => console.log('Welcome email sent to', user.email))
+        .catch(err => console.error('Welcome email failed for', user.email, err && err.message));
+
+
     } else {
       res.status(400).json({ message: 'Invalid user data' });
     }
diff --git a/backend/package-lock.json b/backend/package-lock.json
index cd54df5..e8a7108 100644
--- a/backend/package-lock.json
+++ b/backend/package-lock.json
@@ -10,6 +10,7 @@
       "license": "ISC",
       "dependencies": {
         "@google/generative-ai": "^0.24.1",
+        "@sendgrid/mail": "^8.1.6",
         "bcryptjs": "^3.0.2",
         "cors": "^2.8.5",
         "dotenv": "^17.2.2",
@@ -19,6 +20,7 @@
         "mongodb": "^6.19.0",
         "mongoose": "^8.18.1",
         "multer": "^2.0.2",
+        "nodemailer": "^7.0.6",
         "papaparse": "^5.5.3"
       },
       "devDependencies": {
@@ -954,6 +956,44 @@
         "@noble/hashes": "^1.1.5"
       }
     },
+    "node_modules/@sendgrid/client": {
+      "version": "8.1.6",
+      "resolved": "https://registry.npmjs.org/@sendgrid/client/-/client-8.1.6.tgz",
+      "integrity": "sha512-/BHu0hqwXNHr2aLhcXU7RmmlVqrdfrbY9KpaNj00KZHlVOVoRxRVrpOCabIB+91ISXJ6+mLM9vpaVUhK6TwBWA==",
+      "license": "MIT",
+      "dependencies": {
+        "@sendgrid/helpers": "^8.0.0",
+        "axios": "^1.12.0"
+      },
+      "engines": {
+        "node": ">=12.*"
+      }
+    },
+    "node_modules/@sendgrid/helpers": {
+      "version": "8.0.0",
+      "resolved": "https://registry.npmjs.org/@sendgrid/helpers/-/helpers-8.0.0.tgz",
+      "integrity": "sha512-Ze7WuW2Xzy5GT5WRx+yEv89fsg/pgy3T1E3FS0QEx0/VvRmigMZ5qyVGhJz4SxomegDkzXv/i0aFPpHKN8qdAA==",
+      "license": "MIT",
+      "dependencies": {
+        "deepmerge": "^4.2.2"
+      },
+      "engines": {
+        "node": ">= 12.0.0"
+      }
+    },
+    "node_modules/@sendgrid/mail": {
+      "version": "8.1.6",
+      "resolved": "https://registry.npmjs.org/@sendgrid/mail/-/mail-8.1.6.tgz",
+      "integrity": "sha512-/ZqxUvKeEztU9drOoPC/8opEPOk+jLlB2q4+xpx6HVLq6aFu3pMpalkTpAQz8XfRfpLp8O25bh6pGPcHDCYpqg==",
+      "license": "MIT",
+      "dependencies": {
+        "@sendgrid/client": "^8.1.5",
+        "@sendgrid/helpers": "^8.0.0"
+      },
+      "engines": {
+        "node": ">=12.*"
+      }
+    },
     "node_modules/@sinclair/typebox": {
       "version": "0.27.8",
       "resolved": "https://registry.npmjs.org/@sinclair/typebox/-/typebox-0.27.8.tgz",
@@ -1228,9 +1268,19 @@
       "version": "0.4.0",
       "resolved": "https://registry.npmjs.org/asynckit/-/asynckit-0.4.0.tgz",
       "integrity": "sha512-Oei9OH4tRh0YqU3GxhX79dM/mwVgvbZJaSNaRk+bshkj0S5cfHcgYakreBjrHwatXKbz+IoIdYLxrKim2MjW0Q==",
-      "dev": true,
       "license": "MIT"
     },
+    "node_modules/axios": {
+      "version": "1.12.2",
+      "resolved": "https://registry.npmjs.org/axios/-/axios-1.12.2.tgz",
+      "integrity": "sha512-vMJzPewAlRyOgxV2dU0Cuz2O8zzzx9VYtbJOaBgXFeLc4IV/Eg50n4LowmehOOR61S8ZMpc2K5Sa7g6A4jfkUw==",
+      "license": "MIT",
+      "dependencies": {
+        "follow-redirects": "^1.15.6",
+        "form-data": "^4.0.4",
+        "proxy-from-env": "^1.1.0"
+      }
+    },
     "node_modules/b4a": {
       "version": "1.7.1",
       "resolved": "https://registry.npmjs.org/b4a/-/b4a-1.7.1.tgz",
@@ -1783,7 +1833,6 @@
       "version": "1.0.8",
       "resolved": "https://registry.npmjs.org/combined-stream/-/combined-stream-1.0.8.tgz",
       "integrity": "sha512-FQN4MRfuJeHf7cBbBMJFXhKSDq+2kAArBlmRBvcvFE5BB1HZKXtSFASDhdlz9zOYwxh8lDdnvmMOe/+5cdoEdg==",
-      "dev": true,
       "license": "MIT",
       "dependencies": {
         "delayed-stream": "~1.0.0"
@@ -1970,7 +2019,6 @@
       "version": "4.3.1",
       "resolved": "https://registry.npmjs.org/deepmerge/-/deepmerge-4.3.1.tgz",
       "integrity": "sha512-3sUqbMEc77XqpdNO7FRyRog+eW3ph+GYCbj+rK+uYyRMuwsVy0rMiVtPn+QJlKFvWP/1PYpapqYn0Me2knFn+A==",
-      "dev": true,
       "license": "MIT",
       "engines": {
         "node": ">=0.10.0"
@@ -1980,7 +2028,6 @@
       "version": "1.0.0",
       "resolved": "https://registry.npmjs.org/delayed-stream/-/delayed-stream-1.0.0.tgz",
       "integrity": "sha512-ZySD7Nf91aLB0RxL4KGrKHBXl7Eds1DAmEdcoVawXnLD7SDhpNgtuII2aAkg7a7QS41jxPSZ17p4VdGnMHk3MQ==",
-      "dev": true,
       "license": "MIT",
       "engines": {
         "node": ">=0.4.0"
@@ -2147,7 +2194,6 @@
       "version": "2.1.0",
       "resolved": "https://registry.npmjs.org/es-set-tostringtag/-/es-set-tostringtag-2.1.0.tgz",
       "integrity": "sha512-j6vWzfrGVfyXxge+O0x5sh6cvxAog0a/4Rdd2K36zCMV5eJ+/+tOAngRO8cODMNWbVRdVlmGZQL2YS3yR8bIUA==",
-      "dev": true,
       "license": "MIT",
       "dependencies": {
         "es-errors": "^1.3.0",
@@ -2436,7 +2482,6 @@
       "version": "1.15.11",
       "resolved": "https://registry.npmjs.org/follow-redirects/-/follow-redirects-1.15.11.tgz",
       "integrity": "sha512-deG2P0JfjrTxl50XGCDyfI97ZGVCxIpfKYmfyrQ54n5FO/0gfIES8C/Psl6kWVDolizcaaxZJnTS0QSMxvnsBQ==",
-      "dev": true,
       "funding": [
         {
           "type": "individual",
@@ -2457,7 +2502,6 @@
       "version": "4.0.4",
       "resolved": "https://registry.npmjs.org/form-data/-/form-data-4.0.4.tgz",
       "integrity": "sha512-KrGhL9Q4zjj0kiUt5OO4Mr/A/jlI2jDYs5eHBpYHPcBEVSiipAvn2Ko2HnPe20rmcuuvMHNdZFp+4IlGTMF0Ow==",
-      "dev": true,
       "license": "MIT",
       "dependencies": {
         "asynckit": "^0.4.0",
@@ -2474,7 +2518,6 @@
       "version": "1.52.0",
       "resolved": "https://registry.npmjs.org/mime-db/-/mime-db-1.52.0.tgz",
       "integrity": "sha512-sPU4uV7dYlvtWJxwwxHD0PuihVNiE7TyAbQ5SWxDCB9mUYvOgroQOwYQQOKPJ8CIbE+1ETVlOoK1UC2nU3gYvg==",
-      "dev": true,
       "license": "MIT",
       "engines": {
         "node": ">= 0.6"
@@ -2484,7 +2527,6 @@
       "version": "2.1.35",
       "resolved": "https://registry.npmjs.org/mime-types/-/mime-types-2.1.35.tgz",
       "integrity": "sha512-ZDY+bPm5zTTF+YpCrAU9nK0UgICYPT0QtT1NZWFv4s++TNkcgVaT0g6+4R2uI4MjQjzysHB1zxuWL50hzaeXiw==",
-      "dev": true,
       "license": "MIT",
       "dependencies": {
         "mime-db": "1.52.0"
@@ -2720,7 +2762,6 @@
       "version": "1.0.2",
       "resolved": "https://registry.npmjs.org/has-tostringtag/-/has-tostringtag-1.0.2.tgz",
       "integrity": "sha512-NqADB8VjPFLM2V0VvHUewwwsw0ZWBaIdgo+ieHtK3hasLz4qeCRjYcqfB6AQrBggRKppKF8L52/VqdVsO47Dlw==",
-      "dev": true,
       "license": "MIT",
       "dependencies": {
         "has-symbols": "^1.0.3"
@@ -4360,6 +4401,15 @@
       "dev": true,
       "license": "MIT"
     },
+    "node_modules/nodemailer": {
+      "version": "7.0.6",
+      "resolved": "https://registry.npmjs.org/nodemailer/-/nodemailer-7.0.6.tgz",
+      "integrity": "sha512-F44uVzgwo49xboqbFgBGkRaiMgtoBrBEWCVincJPK9+S9Adkzt/wXCLKbf7dxucmxfTI5gHGB+bEmdyzN6QKjw==",
+      "license": "MIT-0",
+      "engines": {
+        "node": ">=6.0.0"
+      }
+    },
     "node_modules/nodemon": {
       "version": "3.1.10",
       "resolved": "https://registry.npmjs.org/nodemon/-/nodemon-3.1.10.tgz",
@@ -4711,6 +4761,12 @@
         "node": ">= 0.10"
       }
     },
+    "node_modules/proxy-from-env": {
+      "version": "1.1.0",
+      "resolved": "https://registry.npmjs.org/proxy-from-env/-/proxy-from-env-1.1.0.tgz",
+      "integrity": "sha512-D+zkORCbA9f1tdWRK0RaCR3GPv50cMxcrz4X8k5LTSUD1Dkw47mKJEZQNunItRTkWwgtaUSo1RVFRIG9ZXiFYg==",
+      "license": "MIT"
+    },
     "node_modules/pstree.remy": {
       "version": "1.1.8",
       "resolved": "https://registry.npmjs.org/pstree.remy/-/pstree.remy-1.1.8.tgz",
diff --git a/backend/package.json b/backend/package.json
index b92d83b..1adf516 100644
--- a/backend/package.json
+++ b/backend/package.json
@@ -15,6 +15,7 @@
   },
   "dependencies": {
     "@google/generative-ai": "^0.24.1",
+    "@sendgrid/mail": "^8.1.6",
     "bcryptjs": "^3.0.2",
     "cors": "^2.8.5",
     "dotenv": "^17.2.2",
@@ -24,6 +25,7 @@
     "mongodb": "^6.19.0",
     "mongoose": "^8.18.1",
     "multer": "^2.0.2",
+    "nodemailer": "^7.0.6",
     "papaparse": "^5.5.3"
   },
   "devDependencies": {
diff --git a/backend/utils/sendEmail.js b/backend/utils/sendEmail.js
new file mode 100644
index 0000000..8c5a1cc
--- /dev/null
+++ b/backend/utils/sendEmail.js
@@ -0,0 +1,108 @@
+require("dotenv").config();
+
+let sendRaw;
+
+// Validate critical env vars
+if (!process.env.SENDGRID_API_KEY && (!process.env.EMAIL_USER || !process.env.EMAIL_PASS)) {
+  console.warn(
+    "Warning: No email provider fully configured. Emails may fail to send. " +
+    "Set SENDGRID_API_KEY for SendGrid or EMAIL_USER/EMAIL_PASS for SMTP."
+  );
+}
+
+const emailFrom = process.env.EMAIL_FROM || process.env.EMAIL_USER || "no-reply@paisable.com";
+
+// Use SendGrid if API key is available
+if (process.env.SENDGRID_API_KEY) {
+  const sgMail = require("@sendgrid/mail");
+  sgMail.setApiKey(process.env.SENDGRID_API_KEY);
+
+  sendRaw = async ({ to, from, subject, text, html }) => {
+    try {
+      const msg = {
+        to,
+        from: from || emailFrom,
+        subject,
+        text,
+        html,
+      };
+      return await sgMail.send(msg);
+    } catch (err) {
+      console.error("SendGrid email failed", { to, subject, message: err.message });
+    }
+  };
+} else {
+  // Fallback to SMTP via Nodemailer
+  const nodemailer = require("nodemailer");
+
+  const transport = nodemailer.createTransport({
+    host: process.env.SMTP_HOST || "smtp.gmail.com",
+    port: process.env.SMTP_PORT ? Number(process.env.SMTP_PORT) : 587,
+    secure: process.env.SMTP_SECURE === "true",
+    auth: {
+      user: process.env.EMAIL_USER,
+      pass: process.env.EMAIL_PASS,
+    },
+    pool: true,
+    maxConnections: 5,
+    maxMessages: 100,
+  });
+
+  transport.verify()
+    .then(() => console.info("SMTP transporter verified"))
+    .catch(err => console.warn("SMTP transporter verification failed", { message: err.message }));
+
+  sendRaw = async ({ to, from, subject, text, html }) => {
+    try {
+      const mailOptions = {
+        from: from || emailFrom,
+        to,
+        subject,
+        text,
+        html,
+      };
+      return await transport.sendMail(mailOptions);
+    } catch (err) {
+      console.error("SMTP email failed", { to, subject, message: err.message });
+    }
+  };
+}
+
+// Inline welcome email template
+function renderWelcomeTemplate(name = "") {
+  const html = `
+    <div style="font-family: Arial, sans-serif; line-height:1.4; color:#333;">
+      <h2>Welcome to Paisable${name ? ", " + name : ""}!</h2>
+      <p>Thank you for creating an account. We're excited to have you on board.</p>
+      <p>Here are a few things to get started:</p>
+      <ul>
+        <li>Log in and complete your profile</li>
+        <li>Explore transactions and receipts</li>
+        <li>Contact support if you need help</li>
+      </ul>
+      <p>Cheers,<br/>The Paisable Team</p>
+    </div>
+  `;
+
+  const text = `Hi ${name}\n\nWelcome to Paisable! Your account has been created.\n\n- Log in and complete your profile\n- Explore transactions and receipts\n- Contact support if you need help\n\nCheers,\nThe Paisable Team`;
+
+  return { html, text };
+}
+
+// Fire-and-forget welcome email
+async function sendWelcomeEmail(to, name = "") {
+  if (!to) return;
+  const { html, text } = renderWelcomeTemplate(name);
+  const subject = "Welcome to Paisable!";
+  try {
+    await sendRaw({ to, subject, text, html });
+    console.info("Welcome email sent", { to });
+  } catch (err) {
+    console.error("Failed to send welcome email", { to, message: err.message });
+  }
+}
+
+module.exports = {
+  sendWelcomeEmail,
+  sendRaw,
+};