Investing in a Systematic Investment Plan (SIP) is easy and can be done online in just a few clicks. When you invest in a new fund, you select a scheme and make the first payment to initiate your investment. Once that is done you have to set up a procedure for subsequent payments towards the scheme. OTM in Mutual Funds helps you do it.
Similarly, you have to arrange for subsequent payments of your SIP instalments. This has to be done at the time of opening a new SIP. Usually, investors provide bank details and a set of standing instructions for these payments. We can simply understand this as the details specified at the time of initiating your SIP. These instructions include the amount to be auto-transferred from your savings account to the SIP portfolio and the set date of every month.
One Time Mandate or OTM in Mutual Funds simplifies the investment process for you.
What is OTM in Mutual Funds?
The full form of OTM is One Time Mandate. It refers to the process of automating your investments through a one-time registration process. Using it you instruct your bank to debit a fixed amount from your savings account at regular intervals. As instructed by you, the bank credits this amount to your SIP portfolio. The debit requests are sent to the bank from the fund house for SIP/ Lump Sum purchases. These debits are processed through the National Automated Clearing House (NACH). Once you register for OTM, the money transfer from your bank to SIP will be automated. This relieves you of the hassle of transferring money now and then.
Which Transactions are Covered under One Time Mandate OTM in Mutual Funds?
Fresh Lump-Sum Investments
You can make payments towards your lump-sum investments through your bank account. It will be processed as per the OTM form’s fixed limit.
You can initiate investments in new SIPs through the OTM service. You will not be required to submit the bank details or canceled cheque all over again.
Benefits of OTM in Mutual Funds
Choosing a one time mandate for your investments will ensure that you don’t miss out on your SIP contributions every month.
You can avail of the following benefits upon using OTM:
- Firstly, you just need to register for the service once. Post successful registration for OTM the money transfer will be done automatically regularly.
- Secondly, the registration is simple and can be done in a few easy steps.
- Next, you can be assured of a secure money transfer with minimal chances of payment failure.
- There is no cap on the number of SIPs that you can register under a single OTM. However, you must take care that the aggregate value of all your SIPs is within the specified limits.
- OTM automates money transfer, this instills discipline in your investments and is beneficial towards achieving your goals.
How to Register for One Time Mandate (OTM)?
The registration process for OTM is simple. An investor must mention the following details on the OTM form:
- Bank account details: You must provide your bank account number and type of account. Only one account per form is permissible.
- Bank details: You must furnish details such as the name of your bank and the branch in which you hold an account. You must also provide the IFSC code of your bank.
- Upper limit: You need to specify an upper limit that you allow to be transferred through this platform. Remember the figure you mention here can be higher than your SIP contribution or a lump sum payment.
- Personal details: In this section, you must mention your contact details and details of all account holders of your above-mentioned bank account. The details include the names and signatures of all account holders.
- Investment details: You need to provide your folio number and an option for a debit amount. The fixed option is useful for investments like in SIP whereas the maximum amount is suitable for lump-sum payments. You can also set the frequency of debit, i.e. monthly, quarterly, half-yearly, or whenever presented.
The OTM system is the safest and most reliable way to invest online in mutual funds and SIP. In case you want to invest in a SIP, OTM offers a lot of convenience. Doing the process online provides you relief from filling multiple forms and manually clearing bank payments.
How To Automate SIP Payments with Scripbox?
Autopay Through OTP
The process to create Autopay for your SIP is simple. You can easily do it on Scripbox by following these easy steps:
- Firstly, log in to your Scripbox account and click on your profile. Next, select the option ‘ Bank and Autopay’.
- Secondly, select the bank for which you want to initiate Autopay.
- Thirdly, select your primary bank and click on ‘Setup Autopay’.
Autopay Through Form
You can also set up auto-pay through a form through the following steps:
- Firstly, log in to your Scripbox account with your login credentials. Next, click on “Autopay via Form”.
- Secondly, you will receive a NACH form. It will be sent to your registered email address as an attachment.
- Thirdly, review all the details which are pre-filled in the NACH form.
- Fourthly, you can take a printout of the form. You must fill in all the necessary details before signing at the designated place.
- Fifthly, upload the document by clicking on the ” Upload Signed Form” button. Click a picture of the filled form to upload it from your phone.
- Sixthly, click on continue and you will receive a confirmation on your screen after the form is uploaded successfully.
- Lastly, your bank will approve your OTM request. It may take up to 2-3 days for your mandate approval. You will be notified by your bank via SMS and email communication.
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Frequently Asked Questions
Registering for OTM will ensure that you don’t miss out on your SIPs. The transfer happens automatically and securely.
OTM registrations are faster. The ECS take about 30 days. Also, OTM facilitates all future payments without any cheque or demand draft.
Yes, individual investors, as well as corporates, can register through OTM.
Yes, it can be modified.
Yes, if you provide incorrect information and if your bank is not participating in NACH.
There is no such limit.
Yes, you can register multiple bank OTM for a single folio. However, this requires you to submit different OTM forms at each bank.
If the payment is realised before 3pm, the same day NAV is applicable. For post 3pm transactions, NAV of the following day is applicable.
Both lump sum and new SIP transactions can be done through one-time mandate form.