Category : Investing Guides October 18, 20245 minutes read
What is One Time Mandate in mutual funds? One Time Mandate (OTM) in mutual funds is a one-time registration process that can be used by an investor to make the investment process more efficient and seamless. Through an OTM, the investor authorises their bank to debit the pre-established amount from their account for SIP installments. After registering for OTM, investors don’t have to register for each SIP installment. OTM can be beneficial as it is easy and convenient to use, it can be used for multiple SIPs and is time-efficient and quick.
Biller systems automate recurring payments, whereas OTM (One Time Mandate) permits one-time payments. Select between automated, recurring payments (Biller) and one-time payments (OTM) based on your needs.
Every owner of a bank account must sign the OTM form. The signatures on the OTM form and the ones in the bank records have to match. Following that, you will be able to invest in mutual funds via the OTM service.
OTM eliminates the inconvenience of manually transacting in a selected scheme up until the objective is accomplished. In terms of OTM in SIP, Since the funds are released on the same day of the transaction, there is a greater likelihood of unit allotment on the same day if SIP is launched via OTM.
Once a mandate is set up, the Auto-pay via Form (formerly known as OTM) allows for periodic payments to be made via a NACH form. While the RBI-managed NPCI handles payment clearances between governments, banks, financial institutions, and businesses, NACH is specifically used to process regular payments like SIPs, EMIs, credit card payments, and utility bills.
The upper limit for each OTM transaction is set at Rs. 1 crore.
The acronym “OTM” refers to “One Time Mandate.”
Introduction
One Time Mandate (OTM) in mutual funds is a one-time registration process that can be used by an investor to make the investment process more efficient and seamless.
This guide answers the question of what is one time mandate and provides a thorough examination of the One-Time Mandate (OTM) in mutual funds, illuminating its importance, benefits, and qualifying requirements. The core idea of OTM is explored, along with its crucial function in starting Systematic Investment Plans (SIPs) and simplifying the investment process. The guide lists the many benefits of OTM, including its speedy processing time, flexibility for numerous SIPs, and ease of use. Furthermore, it offers investors who are interested in utilising this facility important insights into the qualifying requirements for OTM that are exclusive to Bandhan Mutual Fund. The goal of this blog is to arm investors with the knowledge necessary to make wise judgments by thoroughly examining these subjects.
In the past, many investors found it difficult to invest in mutual funds through the Systematic Investment Plan (SIP) route. Starting SIPs was a complex and time-consuming process wherein, investors had to provide bank information or submit a cancelled cheque. This is a time-consuming and tedious process. With the introduction of OTM, this laborious procedure is completely omitted. Because OTM removes the requirement for such paperwork, investors can now easily begin their investment journey. This provides a simplified and hassle-free method of launching new SIPs.
So, what is OTM in mutual funds? The acronym “OTM” refers to “One Time Mandate.” This is a critical phase in establishing a Systematic Investment Plan (SIP) for investors in mutual funds. Investors select a certain scheme and make their first payment when they start a SIP in a mutual fund.
Investors complete an OTM registration form with the required information and sign it before sending it, usually to their bank, for processing. By taking this step, the bank is given permission to regularly transfer a set amount (known as the SIP amount) to the mutual fund plan of choice.
OTM Registration
The OTM registration process is an essential step while setting up an OTM. Periodic amounts cannot be withdrawn from the investor’s bank account without registration. After the registration process, OTM in mutual funds automates the withdrawal.
By making it possible for investors to electronically complete and submit the mandate form—E-OTM speeds up the procedure.
Moreover, OTM offers lumpsum contributions in addition to benefits beyond SIP initiation. Through the use of the predetermined limit that is mentioned in the OTM form, investors can easily make transactions.
Investors can register an OTM (One-Time Mandate) online or by physically submitting the mandate form at an Official Point of Acceptance. Along with personal data like name, PAN, KYC address, email, and mobile number, the physical form requests bank account details like account number, bank name, branch, account type, and IFSC code.
E-OTM in Mutual funds and OTM in mutual funds essentially changed the mutual fund industry by providing investors with a more practical and effective approach to managing their assets. OTM improves the entire investing process by doing away with paperwork and offering a simple mechanism for lumpsum and SIP deposits. This gives investors the confidence and convenience to navigate their financial journey.
OTM For Joint Account Holders
Information about other account holders is required for joint accounts. Specifying the maximum amount and duration of the mandate is required of investors; OTM in mutual funds can be set for a maximum of 30 years.
Signatures from all joint account holders, if appropriate, must match those on bank records.
A small fee may be required for online registration for OTM in mutual funds. Certain banks may charge this fee to validate the bank account; this fee is returned if the validation is successful and the transaction is approved.
The many advantages of opting for OTM in Mutual fund which include:
Easy
Opting for OTM in mutual funds offers convenience and ease. With OTM, you may be sure that you can easily and regularly add to your SIP portfolio every month. It’s an easy process; you just need to register once to use the service. Regular money transfers will be made automatically for you; you won’t need to do anything more.
Used for Multiple SIPs
There’s no cap on the number of Systematic Investment Plans (SIPs) you can set up when you register under a single OTM (One-Time Mandate). This is one of the major benefits of doing so. Because of this flexibility, investors are not limited by a maximum amount and can create many SIPs across different mutual fund schemes.
It is important to remember that even if there is no cap on the overall number of SIPs, the aggregate value of all SIPs is limited. This restriction ensures that the total amount invested in all SIPs stays below the mandated amount established at the time of OTM registration.
This clause gives investors the flexibility to distribute their money among other mutual funds to diversify their portfolio.
Time Efficient and Fast Processing Time
One benefit of OTM is its quick processing speed. Mutual funds display progress on funds quickly because transactions between the mutual fund house and bank account are conducted in real time. Since mutual funds can only assign units to investors when money is credited to their bank accounts, same-day unit allocation is possible.
Use a One-Time Mandate to start a SIP with Bandhan Mutual Fund.
Investing in OTM has several benefits. They are easy to register for as it is required only once. Additionally, investors can invest in multiple SIPs through OTM. Because of this flexibility, investors are not limited by a maximum amount and can create many SIPs across different mutual fund schemes. Lastly, OTMs have quick processing speed, and same-day unit allocation is possible.
Check out the eligibility for OTM in Bandhan Mutual Fund:
| Type | Eligibility |
| Equity Funds | Yes |
| Debt Funds | Yes |
| Index Funds | Yes |
| ETFs | No |
| Hybrid Funds | Yes |
- One Time Mandate (OTM) in mutual funds is a one-time registration process that can be used by an investor to make the investment process more efficient and seamless.
- Investors complete an OTM registration form with the required information and sign it before sending it, usually to their bank, for processing.
- To use OTM, it is necessary to register. The bank and the mutual fund firm cannot move on with the investor’s SIP without this registration process.
- E-OTM in Mutual funds and OTM in mutual funds essentially changed the mutual fund industry by providing investors with a more practical and effective approach to managing their investments.
- There are several benefits of OTM in mutual funds. They are easy, convenient and time efficient. There’s no cap on the number of Systematic Investment Plans (SIPs) you can set up when you register under a single OTM (One-Time Mandate).
