OTM stands for ‘one-time mandate’. This is a one-time mutual fund registration process, which you must do if you want to invest. Here, in this process, you authorise the banker to execute debits from your savings bank account up to a specific limit depending on the requests received from a mutual fund company. AMC or asset management company or registrar may forward the deduction request to your bank for an SIP or a lumpsum in a mutual fund. Such deductions take place via NACH (National Automated Clearing House).
Mutual fund investment can be quick, efficient, and simple, particularly if it is performed online by you. You just need to decide on the appropriate mutual fund for investment as per your preference, rest of the procedure may be completed in just a few clicks. To make it simpler, you can also use the OTM route.
How can you register for OTM?
Read on here to understand the step-by-step approach for registering for OTM mandate –
- Bank account information
You as an investor must provide details of your bank account to the mutual fund company to activate your OTM request. Such details include bank name, account type, account number along with IFSC code.
- Personal information
Here in this section, you as an investor must give your name, address, PAN, mobile number, and email and in the case of a joint account, you must provide details of other account holders too. Alongside your personal details, you must mention other details as well. Below mentioned are the other details you must provide –
- Upper limit – Here, you must mention the higher limit that you agree can be transferred via OTM. Note that your fund transaction will be processed easily only if it falls under the upper limit.
- Investment details – You must give the application number or folio number and the name of the asset management company.
- OTM period – You need to state the time period till you want the OTM to be continued. In case you have no clarity about the time period, you must either select the default option or select ‘until cancelled’ option.
- Signature – After you have filled out the above crucial detailed in your OTM form, you must sign it with other joint holders, if any. Note that the sign on the OTM application form must match the sign registered in your savings bank account.
What are the benefits of choosing the OTM mode for your mutual fund investment?
- Initial and the most crucial advantage of using OTM for a mutual fund is it makes investment in mutual funds hassle-free and stress-free. This is because an OTM is a one-time consent, which you must give. After giving consent, your surplus investment is deducted automatically on a predetermined basis.
- Your funds are realised on transaction day; thus, the probability of the same day’s unit allotment is extremely high.
- This mode ensures discipline and timely deduction of the investible amount in mutual fund through an SIP, without any hiccups.
OTM is considered as one of the safest and most reliable means of making mutual fund investments. Choosing this mandate sets you free from the burden and stress of manually transferring your investible funds towards market investments.