One Time Mandate Explained

Convenience is everything in today’s world. Subscriptions, utilities, loan EMIs, whatever we are paying for, there is one thing we all want: less hassle. Imagine simplifying payments to be automatic, secure, and under your control.

The same principle goes when you invest in mutual funds. When dealing with mutual funds, automation and ease of investments are essential!

For those looking to invest in mutual funds, missing a Systematic Investment Plan (SIP) payment or dealing with manual payments can be tedious.

That is where the One Time Mandate (OTM) comes in.

Let us understand the meaning of One Time Mandate and how you can register for it.

What is a One Time Mandate?

Mutual fund investing is possible through one-time lump sums or regular SIP (systematic investment plan) investments. For those who choose to invest in an SIP option - they have to make regular fixed investment.

Therefore, investing money at regular intervals, like in a month, week or quarter may be challenging and time-consuming. Thus, to avoid non-payment, the OTM is a must for all mutual fund investments.

One time mandate means you are giving your bank the authorization to automatically debit from your bank account for mutual fund investments. This mandate tells the bank that they can debit the money directly from your bank account every time a payment for an SIP is due without your further authorisation.

The feature of OTM has to be set up once, provided you have set a limit for both the amount of money and the frequency of payments. The flexibility to control the amount and frequency of deductions makes OTM suitable for mutual fund investors who want to simplify their payment process.

How OTM Mandate Helps Your Investments

Streamlined payments with OTM: You do not have to remember any of the SIP transfers and any payment dates. Once you have set up such a payment system, it will start making those payments automatically for you without requiring any time or effort.

Consistency with discipline: Automated payments safeguard you from missing out on SIP contribution. This is one of the most imperative factors that help maintain the discipline required for long-term investing.

More than one SIP: More than one SIP can be registered under the same OTM. Ensure that the total value of your registered SIPs does not exceed the predetermined mandate limit.

How to register for OTM?

There are two ways to register for OTM - fill out a form or do it online.

One Time Mandate form

1. Download the OTM form from your mutual fund house website.
2. The form will need personal information, such as your name, PAN number, and Folio number.
3. You also have to fill in investment details like choice of scheme or option or facility.
4. Other details required are - OTM start date and OTM end date with maximum validity of 40 years, and amount per instalment. You will also have to mention the upper limit allowed for OTM.
5. Provide your bank account details, including the account number, bank name, IFSC code, and account type.
6. Once all the details are filled, sign the form. Note that the signature should match with your bank account.

Online

1. Log in to your account using your user ID/PAN and password with OTP.
2. Choose the OTM option. And click on Register a new OTM Request
3. Select your bank’s name, enter mandatory information
4. Click ‘Order Review enter OTP. Then confirm the OTM registration by selecting ‘Proceed.’
5. Click on Go for Net Banking Base OTM to authenticate and complete the registration
6. Refer the eMandate Registration Form and click on Submit
7. Login to your banks Netbanking portal authenticate the mandate and submit
8. On successful authenticate, your mandate will be approved by the bank

A confirmation message will appear on screen. Additionally, you will receive an email and SMS confirmation on the OTM registration. OTM registration may take up to 15 calendar days. Be aware that some banks might charge one time mandate registration charges.

Final thoughts

OTM - where convenience and automation are essential to manage personal finances. OTM mandate allows your SIP payments to be processed in an organised way, thus minimising the risk of missed payments and disciplined investing.

It allows you to invest smartly, capitalise on timesavings, and channel your efforts toward wealth building with minimum hassle.

Above article is authored by Quantum.

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