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Most people prefer to invest in a Systematic Investment Plan (SIP) online. When you invest in a new fund, you will initiate the process by selecting the scheme and making the first payment towards the chosen scheme. Voila, that was easy! How about the subsequent payments?
You will also have to arrange for the subsequent payments at the time of opening a new SIP. Usually, investors provide their bank details and set standing instructions such that the specified amount will be auto-transferred from your savings account to the SIP portfolio on a set date every month.
One Time Mandate (OTM) is one of the convenient ways of investing. Let us explore OTM in detail.
A One Time Mandate (OTM) refers to a one-time registration process where you instruct the bank to deduct a certain amount from your savings account at regular intervals to be credited into your SIP portfolio. Once you successfully register for OTM, the money transfer will be automated, and you don’t have to worry about transferring money now and then.
Choosing OTM will ensure that you don’t miss out on contributing to the SIP portfolio every month. Here is a list of reasons why you should choose OTM:
You are required to register once per folio by filling and submitting the properly signed OTM Form. The signature must be as per the bank documents.
Details, such as bank account number, bank and branch name, IFSC and/or MICR code, the daily limit of the amount, folio number or application number, signature, and contact details, should be filled in the form.
Make sure that there is no overwriting in the form to avoid rejection.