Systematic Investment Plans (SIPs) enable investors to invest regular money in mutual funds, encouraging systematic investing and even market fluctuation. Manual authorization for every SIP installment used to be required, which may be time-consuming and subject to delays.
This process has been streamlined through the One-Time Mandate (OTM) facility, making SIP investments fast and automated.
What is a One-Time Mandate?
A One-Time Mandate (OTM) is a facility given by an investor to a bank, authorizing automatic debits from his account for the purpose of making SIP contributions. With an OTM, investors avoid the requirement of manual approvals for each SIP transaction, providing timely and systematic investments. It makes the process of investment smoother and more convenient for investors.
Advantages of Including a One-Time Mandate in SIPs
1. Simplified Investment Process
With OTM, SIP installments can be authorized for automatic debits, so that manual intervention for every payment is not required. This makes investing easier and saves administrative work.
2. Ensures Timely Payments
OTM guarantees on-time SIP contributions, lowering the chances of missing payments due to negligence or technical glitches. Consistency is the key to attaining long-term financial objectives.
3. Convenient for Multiple SIPs
For those who have more than one SIP, OTM clubbing payment approvals to a single mandate makes it easy for them to deal with different investments and to ensure that all the contributions are made on time.
4. Time and Effort Saving
With automatic payments of SIP, OTM spares investors the time and effort to make manual payments, and they can concentrate on other financial planning.
5. Enhanced Security
OTM is a secure center, lessening the possibilities of payment failure that could arise with other payment channels online due to technical complications.
How to Automate Your SIPs?
Automating SIPs through OTM can be accomplished via two primary methods:
1. Autopay via OTP
This method allows investors to set up automatic payments using a One-Time Password (OTP) authentication. It’s quick, secure, and eliminates the need for physical paperwork. Once set up, monthly SIP payments are debited automatically, ensuring timely contributions.
2. Autopay via Form
Alternatively, investors can open OTM by filing a physical or electronic application with their bank. This is an option for those who do not have access to net banking facilities or prefer the old-fashioned method. SIP payments are then automated according to the mandate instructions after processing.
Final Thoughts
Having a One-Time Mandate in your SIP investments has many advantages, such as automation, prompt payments, and easy handling of multiple SIPs. OTM minimizes manual intervention, which increases the effectiveness and efficiency of your investment plan, enabling you to concentrate on meeting your financial objectives without the bother of paperwork.
Whether you are an experienced investor or a first-time SIP investor, using the OTM facility can make a big difference in your investing experience.
