diff --git a/client/config/config.go b/client/config/config.go
index f9d9608fa340..56c69914c2cb 100644
--- a/client/config/config.go
+++ b/client/config/config.go
@@ -5,6 +5,7 @@ import (
 	"fmt"
 	"os"
 	"path/filepath"
+	"strings"
 
 	"google.golang.org/grpc"
 	"google.golang.org/grpc/credentials"
@@ -166,6 +167,12 @@ func CreateClientConfig(ctx client.Context, customClientTemplate string, customC
 	return ctx, nil
 }
 
+// CustomizeConfigTemplate inserts custom configuration settings into the default config template by replacing a predefined placeholder
+// This approach prevents issues that could arise from direct concatenation, such as incorrect section categorization of custom settings.
+func CustomizeConfigTemplate(customConfig string) string {
+	return strings.Replace(DefaultClientConfigTemplate, CustomConfigKey, customConfig, -1)
+}
+
 // getGRPCClient creates and returns a new gRPC client connection based on the GRPCConfig.
 // It determines the type of connection (secure or insecure) from the GRPCConfig and
 // uses the specified server address to establish the connection.
diff --git a/client/config/config_test.go b/client/config/config_test.go
index 76f8bd7eb171..bfe6b1d3e2d8 100644
--- a/client/config/config_test.go
+++ b/client/config/config_test.go
@@ -80,14 +80,14 @@ func TestCustomTemplateAndConfig(t *testing.T) {
 		Note: "Sent from the CLI.",
 	}
 
-	customClientConfigTemplate := config.DefaultClientConfigTemplate + `
+	customConfig := `
 # This is the gas adjustment factor used by the tx commands.
 # Sets the default and can be overwritten by the --gas-adjustment flag in tx commands.
 gas-adjustment = {{ .GasConfig.GasAdjustment }}
 # Memo to include in all transactions.
 note = "{{ .Note }}"
 `
-
+	customClientConfigTemplate := config.CustomizeConfigTemplate(customConfig)
 	t.Run("custom template and config provided", func(t *testing.T) {
 		clientCtx, cleanup, err := initClientContextWithTemplate(t, "", customClientConfigTemplate, customClientConfig)
 		defer func() {
diff --git a/client/config/toml.go b/client/config/toml.go
index 21a09d4f8d65..fb4709a849b3 100644
--- a/client/config/toml.go
+++ b/client/config/toml.go
@@ -8,7 +8,9 @@ import (
 	"github.com/spf13/viper"
 )
 
-const DefaultClientConfigTemplate = `# This is a TOML config file.
+const (
+	CustomConfigKey             = "#{CustomConfigs}"
+	DefaultClientConfigTemplate = `# This is a TOML config file.
 # For more information, see https://github.com/toml-lang/toml
 
 ###############################################################################
@@ -28,6 +30,14 @@ node = "{{ .Node }}"
 # Transaction broadcasting mode (sync|async)
 broadcast-mode = "{{ .BroadcastMode }}"
 
+###############################################################################
+###                           custom config                                 ###
+###############################################################################
+
+### Custom Configurations
+# The placeholder below is used for injecting custom configurations.
+#{CustomConfigs}
+
 ###############################################################################
 ###                           gRPC Configuration                            ###
 ###############################################################################
@@ -41,6 +51,7 @@ address = "{{ .GRPC.Address }}"
 # It can be overwritten by the --grpc-insecure flag in each command.
 insecure = {{ .GRPC.Insecure }}
 `
+)
 
 var configTemplate *template.Template
 
diff --git a/simapp/simd/cmd/config.go b/simapp/simd/cmd/config.go
index cda73a922dd1..f065f6f44ae2 100644
--- a/simapp/simd/cmd/config.go
+++ b/simapp/simd/cmd/config.go
@@ -56,15 +56,17 @@ func initClientConfig() (string, interface{}) {
 		},
 	}
 
-	// The default SDK app template is defined in serverconfig.DefaultConfigTemplate.
-	// We append the custom config template to the default one.
-	// And we set the default config to the custom app template.
-	customClientConfigTemplate := clientconfig.DefaultClientConfigTemplate + strings.TrimSpace(`
+	// Create a customConfig to define specific settings.
+	customConfig := strings.TrimSpace(`
 # This is default the gas adjustment factor used in tx commands.
 # It can be overwritten by the --gas-adjustment flag in each tx command.
 gas-adjustment = {{ .GasConfig.GasAdjustment }}
 `)
 
+	// The CustomizeConfigTemplate function is then employed to seamlessly integrate these custom settings
+	// into the default configuration template.
+	customClientConfigTemplate := clientconfig.CustomizeConfigTemplate(customConfig)
+
 	return customClientConfigTemplate, customClientConfig
 }