Contents
- What is One Time Mandate (OTM)?
- Benefits of One Time Mandate (OTM):
- How do I register for the OTM facility?
- Information needed in the OTM Form
- How many SIPs can be registered through the OTM facility?
- Transactions that can be done through the OTM facility
- More About How to invest in SIP using OTM
- Conclusion
Systematic Investment Plan or SIP is a mode of investing money in mutual funds. There are multiple benefits of investing in mutual funds. SIP investment is a strategy to invest a certain amount of money at regular periods. Investing in this makes it easy for investors to buy equity mutual fund or debt mutual funds regularly on a particular date of the month, in order to build substantial wealth quickly. To start online SIP from anywhere, investors have to follow two steps. The first step is to pay. The second step is to add a mandate so that the monthly SIP can be deducted automatically. In this way the investment becomes automated. There are 3 types of the mandate: E-Mandate, OTM, and biller. In this article, we will tell you how to invest in SIP using OTM (One Time Mandate) option.
What is One Time Mandate (OTM)?
- Today, e-wallets have become very popular. You fund these through your bank account and then use the money to transact without going through any payment gateway. We suggest you One Time Mandate (OTM) as an e-wallet for the purpose of investing.
- OTM involves a one-time registration process that will allow investors to conveniently undertake lumpsum / SIP investments in both, offline and online mode.
- By registering this mandate, you will entitle the relevant bank (which is registered in your Mutual Fund Portfolio) to debit a definite maximum amount per day, as per your choice (Say, up to ₹ 10,000/- per day) towards investment in the scheme of your choice. This mandate can either be provided for a fixed time (Say, 5 years) or remain valid until you cancel it.
- Once you register the OTM with the relevant bank, you can transact smoothly, simply by ticking the OTM box either in the online or offline Form. It saves you from the trouble of affixing a cheque or routing the payment through a payment gateway, remembering your Debit card / net banking details, etc.
Benefits of One Time Mandate (OTM):
- It is a one – time registration method.
- Invest through any form (Physical/ Internet) via SIP or as a lump sum.
- Invest offline without affixing a cheque or online without bothering the Payment Gateway.
How do I register for the OTM facility?
Registration is simply a one time process per Folio. All you require is to fill and submit the properly signed ‘OTM Form’. The signatures on the form should be as per your bank documents because the form will be transferred to your bank branch. There is no need to attach a cheque copy or canceled cheque.
Information needed in the OTM Form
Details to be mentioned on the form are:
- Bank account number
- Bank name & branch
- IFSC and/or MICR Code
- Amount (Your daily limit)
- Folio number or application number
- Signature as in bank records
- Mobile no & Email id
There should be no overwriting on the OTM form. Overwritten forms will not be processed.
Specifying the amount on the OTM Form:
A reasonably high limit is suggested. This will help you undertake additional investments at short notice.
How many SIPs can be registered through the OTM facility?
There is no cap on the number of SIPs that can be registered through the OTM facility. However, the total of your multiple SIP installments in a day should not be more than the amount limit specified in the OTM form at the time of registration.
Transactions that can be done through the OTM facility
- Initiate fresh lump sum investments : The payment towards your investment will pass directly through your bank account based on your fixed limit on the OTM form. As mentioned earlier, you need not submit a cheque / pass through the payment gateway each time you transact.
- Start new SIPs: without submitting the bank details and attaching a canceled cheque each time.
More About How to invest in SIP using OTM
- Both individual and non-individual unitholders can avail the benefits of OTM.
- A separate OTM has to be registered for each folio.
- The OTM facility is not restricted to a particular bank or branch. As long as a bank is participating in the NACH system, you can register the OTM facility for any of the bank branches. Likewise, for all bank branches engaging in ECS (Debit) clearing, their account holders can enroll for the OTM facility. However, please take care to ensure that you register the OTM with the same bank/s mentioned in your Folio.
- Currently, the upper limit is ₹ 5 Crores and the lower limit is ₹ 1,000/-. This is the daily limit for transactions through all modes.
- The timeline to complete the OTM registration process will depend on NACH and ECS modalities, the process does not exceed 30 days. In various situations, it could proceed within 15 working days.
- There is no cap on the number of SIPs that can be registered through the OTM facility. However, the sum total of various SIP installments in a day should not be more than the amount limit mentioned in the OTM form at the time of registration.
- Multiple banks/bank accounts for the OTM facility in the same folio can be registered. Simply submit separate OTM forms for each of the bank/bank accounts. The last submitted bank account registration will be attended as the default bank account.
Read About: SIP vs mutual funds
Conclusion
One Time Mandate (OTM) facility is a one-time mandate registration process that will enable you to transact seamlessly in a simple, convenient and paperless manner. Using the OTM facility, you can instruct your bank to allow a debit of a certain amount, with a fixed daily upper limit in your account, whenever you wish to transact. Having registered an OTM you can subscribe without having to initiate any payment from your end.
For looking forward to mutual funds plans and schemes. Visit our website WealthBucket.
Our expert team will help you invest wisely in mutual funds. Services we offer are equity fund investment, Debt mutual fund, Large Cap mutual fund or Multi-Cap mutual fund.
You can call us at +91 9999379929. Email at contact@wealthbucket.in. queries related to SIP investment. One can calculate their SIP investments in SIP Calculator to know about their returns.
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