Here are some of the benefits of a One Time Mandate in SIP

SIP (Systematic Investment Plan) is one of the most preferred modes of investing in mutual funds. In a SIP mode, you invest a particular sum in your mutual fund scheme for a defined period and specific frequency. To initiate a SIP, you pay the first installment and give standing instructions to your bank that an amount is to be auto-deducted from your bank account at a pre-defined frequency and date (usually a fixed date of every month). This medium for mutual fund investment is known as the One Time Mandate (OTM). OTM is one of the most convenient ways of investing in mutual funds and ensures you do not miss paying your SIP installments on time.

Here is a quick overview of OTM in SIP and its benefits:

What is OTM?

OTM is a one-time registration process where you instruct your bank to pay a specific sum from your bank account towards a mutual fund scheme at regular, pre-defined intervals. Once you set the OTM, your SIP installment is auto-deducted from your bank account.

For instance, you can create an OTM with your bank to transfer Rs. 500 on the 4th day of each month towards your XYZ mutual fund scheme.

What are the benefits of an OTM?

Here are some of the benefits of an OTM in SIP:

• By opting for an OTM in your SIP, you can be assured that you will not miss out on paying any of your mutual fund installments.
• OTM is a convenient mode of investing in mutual funds. You only have to register for the OTM service once, and thereafter, the money transfer happens automatically, as instructed.
• The OTM registration process is simple, convenient, and quick.
• OTM money transfers are precise and highly secure, minimizing any chances of a payment failure. In other online payment modes like NEFT, online bank transfer, etc., there are high chances of payment failure due to technical issues.
• You can register multiple SIPs under the same OTM. There is no upper cap on the number of SIPs allowed under a single OTM. However, be careful about the total value of all your SIPs and ensure it is within the specific bank account limits.
• OTMs create a financial discipline in investors. You pay yourself first rather than splurge the money. Your funds are redirected towards savings and ultimately achieving your financial goals.

How to register for an OTM in SIP?

You can register for an OTM in a mutual fund SIP by filling the OTM form for your mutual fund scheme. You have to stamp your original signature on the form and provide details, such as:

• Bank name
• Bank account number
• Bank branch
• IFSC and/or MICR code
• SIP amount
• SIP frequency and date
• SIP period
• Folio number
• Contact details

Avoid any overwriting in the form. Also, it is beneficial to select a SIP date and amount that is financially suitable for you. For instance, if you receive a salary credit on the 1st of every month, you can schedule your OTM payment on the 2nd of every month up to an amount that does not financially restrict you for the rest of the month.

Conclusion

You can use the Tata Capital Moneyfy app to begin your mutual fund investment journey. The Moneyfy app allows you to invest, monitor, and manage all your mutual fund schemes from a single platform.