SIP or systematic investment plan is often preferred by investors as it offers far better protection against market turbulences, makes the investments affordable for common investors, and fetches higher earnings irrespective of market conditions. Choosing the desired investment scheme and paying the first SIP may be easy, but an investor’s job doesn’t end there. He/she has to make the SIP payment periodically to ensure sufficient wealth accumulation as per investment objective. With the One-Time Mandate or OTM, however, an investor can avail the auto-pay option to continue SIP through the eNACH mandate.
So, what is One-time mandate and how does it benefit an investor? Here’s all the information about this payment facility that investors need to know about.
A one-time mandate in SIP involves:
After the OTM facility is activated, the periodic SIP payments are automated and this can act as a big relief for investors as it eliminates the manual task of transferring money frequently into the investment account.
The two types of payments covered under OTM are:
With OTM, an investor can make payments towards lump-sum investments using his/her bank account. This gets processed as per the OTM facility’s maximum limit.
One can also initiate new SIP investments through the OTM facility. In this case, an investor does not have to submit his/her bank details or canceled cheque once again.
Some of the main advantages of using OTM are:
It is easy to register for an OTM facility in SIP. An investor only has to fill and submit an OTM form with his/her signature, thereby agreeing to the facility’s terms and conditions. It normally takes up to 10-15 working days for registration of One-Time Mandate to be accepted and registered by the bank. Whereas an e-mandate takes just 2 days to get registered.
OTM facility is known as the ‘e-wallet of investing’. This safe payment process is technologically advanced and entirely digital. Therefore, an investor will not have to go through any payment delays. This is a convenient option as compared to filling out numerous cheques or following the lengthy auto-debit formalities.
SIP OTM is a safe investment mechanism. To make the process smooth and quick, it involves seeking information from investors, like bank account and mutual fund details. OTM requires very little time as compared to other payment processes that waste time in frequent repetition of formalities.
By using a single One-Time Mandate registration, an investor can easily automate multiple SIP payments. While there is no limit on the number of SIPs that are allowed to be registered under a single OTM, an investor must ensure that the net value of all SIPs combined falls under the specified limit.
Financial success comes by setting long-term goals, high willpower and significant effort. Sometimes, wealth creation is not just about investing loads of money, but about investing it smartly. Processes like OTM that help in automating payments at pre-decided periodic intervals. Thus, it infuses a sense of financial discipline in the long run.
As mentioned earlier, it is easy to register for OTM. While registering for this facility, an investor has to mention the below-mentioned details in the form:
The fixed option can be used for SIP investments, whereas the maximum amount is ideal for lump-sum investments. An investor can also opt for setting the payment frequency, which can be monthly, quarterly, half-yearly, or as presented.
To automate SIP on the Fisdom app, you can follow the below-mentioned steps:
The OTM mechanism in SIP is one of the safest and most reliable alternatives for investing in mutual funds online. Those who want to invest in mutual funds through SIP must make the most of OTM, since it comes with a lot of convenience. With most platforms offering the process online, one can do away with filling multiple forms or manual bank payment clearances.
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