3 min
02-August-2024
A One Time Mandate (OTM) is a one-time registration process where a mutual fund investor authorises their bank to execute debits to their bank account up to a certain limit based on requests received from the mutual fund company. This allows for automated and hassle-free investments into mutual fund schemes through Systematic Investment Plans (SIPs).
In this article, we will explore how to start sip using OTM, the benefits of using an OTM for mutual fund investments, how the process works, and the steps involved in setting it up. We will also discuss the types of transactions that can be facilitated through an OTM and address common FAQs around this feature.
By the end, you will have a better understanding of how an OTM can simplify your mutual fund investment journey.
When you start a new SIP, you will also need to make arrangements for the upcoming payments. Investors typically supply their bank information and set up standing orders so that, on a predetermined day each month, a certain sum is automatically transferred from your savings account to the SIP portfolio.
Investing using One Time Mandates (OTMs) is a convenient option. Let's take a closer look at OTM.
Through your bank's portal, you need to navigate to the mandate or standing instruction section, enter the relevant details like your folio number, bank account, debit amount, and frequency, and then submit the mandate. You may be required to verify the mandate by entering an OTP sent to your registered mobile number.
Alternatively, you can set up the OTM through your mutual fund investment platform. Here, you need to log in, locate the OTM or autopay option, provide the necessary bank account information, and complete the registration process. You may be redirected to your bank's website to approve the mandate. The online OTM registration is a quick and convenient process, with the mandate typically activated within a few business days.
The offline process involves more paperwork and can take up to a few weeks for the mandate to be registered and activated. However, it may be the preferred option for investors who do not have access to online banking facilities or simply prefer the traditional method.
Regardless of the approach, setting up an OTM ensures hassle-free and automated SIP investments, eliminating the need for manual fund transfers every time.
By making use of the convenience and reliability of the One-Time Mandate, mutual fund investors can focus on their long-term financial goals without the hassle of managing regular SIP payments.
Essential tools for mutual fund investors
In this article, we will explore how to start sip using OTM, the benefits of using an OTM for mutual fund investments, how the process works, and the steps involved in setting it up. We will also discuss the types of transactions that can be facilitated through an OTM and address common FAQs around this feature.
By the end, you will have a better understanding of how an OTM can simplify your mutual fund investment journey.
OTM in an SIP: An overview
The majority of investors would rather make their Systematic Investment Plans (SIP) online. You will start the process of investing in a new fund by choosing the plan and sending the first payment to the plan of your choice. Well, that was simple! What about the next instalments?When you start a new SIP, you will also need to make arrangements for the upcoming payments. Investors typically supply their bank information and set up standing orders so that, on a predetermined day each month, a certain sum is automatically transferred from your savings account to the SIP portfolio.
Investing using One Time Mandates (OTMs) is a convenient option. Let's take a closer look at OTM.
What is OTM?
A One Time Mandate (OTM) is a one-time registration procedure wherein you give the bank instructions to periodically take a specific sum out of your savings account and credit it to your SIP portfolio. Once your OTM registration is complete, you won't need to bother about periodically transferring money because it will all be automated.How does OTM work?
The One Time Mandate (OTM) is a one-time registration process where investors authorise their bank to execute debits to their account based on requests from the mutual fund company. This automates regular investments, such as Systematic Investment Plans (SIPs), by eliminating the need for manual payments. The process involves filling out an OTM form, providing bank details, and submitting it to the mutual fund company or online platform. Once registered, the bank executes the debits based on the investor's instructions, ensuring timely and hassle-free investments.How to set up a one-time mandate for a mutual fund SIP?
Setting up a One-Time Mandate (OTM) for a mutual fund Systematic Investment Plan (SIP) can be done through both online and offline methods. The process involves providing your bank account details and authorising the mutual fund company to debit the specified amount at regular intervals.Setting up a one-time mandate online
To set up an OTM online, you can either do it through your bank's internet banking portal or the mutual fund platform.Through your bank's portal, you need to navigate to the mandate or standing instruction section, enter the relevant details like your folio number, bank account, debit amount, and frequency, and then submit the mandate. You may be required to verify the mandate by entering an OTP sent to your registered mobile number.
Alternatively, you can set up the OTM through your mutual fund investment platform. Here, you need to log in, locate the OTM or autopay option, provide the necessary bank account information, and complete the registration process. You may be redirected to your bank's website to approve the mandate. The online OTM registration is a quick and convenient process, with the mandate typically activated within a few business days.
Setting up a one-time mandate offline
For an offline OTM setup, you need to obtain the mandate form from your bank or the mutual fund AMC, fill it out with your bank account details, SIP folio number, and other required information, and then submit the signed form.The offline process involves more paperwork and can take up to a few weeks for the mandate to be registered and activated. However, it may be the preferred option for investors who do not have access to online banking facilities or simply prefer the traditional method.
Regardless of the approach, setting up an OTM ensures hassle-free and automated SIP investments, eliminating the need for manual fund transfers every time.
Why should you set up a one-time mandate?
The One-Time Mandate (OTM) offers several benefits that make it a compelling choice for mutual fund investors.1. Automated transfers
The OTM allows for automated debits from your bank account, ensuring timely and uninterrupted Systematic Investment Plan (SIP) contributions. This eliminates the need for manual fund transfers, reducing the risk of missed payments and streamlining the investment process.2. Convenient registration process
Setting up an OTM is a straightforward process, whether done online or offline. The registration can be completed in a few simple steps, making it a hassle-free option for investors to set up their SIP investments.3. Reliability
Once the OTM is registered, the mutual fund company can initiate the debit requests to your bank, which will then automatically transfer the funds. This reliable process ensures that your SIP investments are executed as per your instructions, without any delays or complications.4. Promotes discipline
The automated nature of the OTM encourages disciplined investing by ensuring that your SIP contributions are made on time, every time. This can be particularly beneficial for investors who may struggle with the consistency of manual fund transfers.By making use of the convenience and reliability of the One-Time Mandate, mutual fund investors can focus on their long-term financial goals without the hassle of managing regular SIP payments.
Conclusion
Investing can be made easier and more convenient with the One Time Mandate for SIP, which also offers advantages including less paperwork, easier transactions, and more efficiency. By allowing automatic deductions, OTM encourages responsible saving and guarantees constant investment. In the end, it gives you the confidence to easily reach your financial objectives.Essential tools for mutual fund investors
