Sign In

OTM in Mutual Funds: Meaning, Benefits, and More​​​​

As kids, we all wished never to ask our parents for their permission. Asking them repeatedly for approval for the same things was time-consuming and required a lot of effort.

The same can be said about online investing. Investing in mutual funds can be a dynamic process. But if you have to take permission from your bank every time you invest through an SIP (Systematic Investment Plan that lets you regularly invest in a mutual fund), you may waste a lot of time.

What if there was a way not to get stuck in this loop? A one-time mandate, also known as an OTM in mutual funds, can help you here. Let’s find out how!

What is an OTM in mutual funds?

A one-time mandate is a process that lets you automate your investments in mutual funds in India. Once you set up an OTM, you no longer need to invest your money every time manually. You can set the date and amount of investment, and your bank automatically invests the said amount in the chosen mutual fund. It can be beneficial for SIP investments as it removes the hassles of periodic transfers and simplifies things for you to a great extent.

How to register for an OTM in mutual funds?

You can set up a mandate for your investments in mutual funds in India on the broker’s online portal or the Asset Management Company’s (AMC) website. Here are the steps for the same:

  • Enter your bank account details: You can start by entering your bank’s name, branch, account number, account type, IFSC code, etc.
  • Enter your details: Name, address, email address, mobile number, PAN number, etc. If it is a joint account, you may also be asked to enter the other account holder’s information.
  • Specify the upper limit: The highest amount of money that can be transferred from your bank account to the mutual fund company is the upper limit.
  • Enter the investment details: This includes the AMC’s name, folio number, or application number.
  • Mention the period: The period during which the bank can invest money on your behalf. It can range from a month to a few years.
  • Sign: Once you have entered all the fields, cross-check the same and sign.

Advantages of an OTM in mutual funds

  1. The entire process is straightforward and quicker as you do not have to perform any action manually. It takes a few minutes to fill out the registration form and a few days for the bank to approve the mandate.

  2. Automation ensures that you invest your money in a disciplined manner. If you were to invest your money manually, you may forget sometimes or choose a higher/lower investment amount by mistake that may or may not align with your goals.

  3. There is no cap on the number of investments you can make through an OTM. It means you can set the process once and continue to invest your money for several years.

  4. Setting up an OTM for mutual funds in India is safe and reduces the chances of payment failures.

Conclusion

If you invest in mutual funds online, setting a mandate can significantly reduce the time and effort you need to spend. Moreover, it also ensures that your investments continue without any lapses due to human errors.

FAQs

  1. Is an OTM available for all?

Yes, all investors can use an OTM for their online mutual fund transactions.

  1. Can the OTM be modified?

Yes, you can modify the OTM if you decide to change your investment values in the future.

  1. How many SIPs can be registered with one OTM?

You can add as many SIPs as you want with one OTM. However, the total value of all the SIPs should not be more than the upper limit fixed for the OTM. If this is the case, you can modify the OTM to accommodate all your SIPs.

​​ ​​ ​
Disclaimer:
This is an investor education and awareness initiative by Nippon India Mutual Fund.
Helpful information for investors: All Mutual Fund investors have to go through a one-time KYC (know your Customer) process. Investors should deal only with registered mutual funds, to be verified on SEBI website under 'Intermediaries/ Market Infrastructure Institutions'. For redressal of your complaints, you may please visit SEBI SCORES . For more info on KYC, change in various details & redressal of complaints, visit mf.nipponindiaim.com/investoreducation/what-to-know-when-investing This is an investor education and awareness initiative by Nippon India Mutual Fund.

The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. The sponsor, the Investment Manager, the Trustee or any of their directors, employees, associates or representatives (“entities & their associates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Entities & their associates including persons involved in the preparation or issuance of this material shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material. Recipient alone shall be fully responsible for any decision taken on the basis of this document. Language Disclaimer:
While utmost care has been taken in translating the article into respective regional language(s), in case of any confusion or difference of opinion, article available in English language should be deemed as final. The article provided herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional advice for the readers. The document has been prepared on the basis of publicly available data/ information, internally developed data and other sources believed to be reliable. The sponsor, the Investment Manager, the Trustee or any of their directors, employees, associates or representatives (“entities & their associates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Entities & their associates including persons involved in the preparation or issuance of this material shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of loss of profits arising from the information contained in this material. Recipient alone shall be fully responsible for any decision taken on the basis of this article. "ABOVE ILLUSTRATIONS ARE ONLY FOR UNDERSTANDING, IT IS NOT DIRECTLY OR INDIRECTLY RELATED TO THE PERFORMANCE OF ANY SCHEME OF NIMF. THE VIEWS EXPRESSED HEREIN CONSTITUTE ONLY THE OPINIONS AND DO NOT CONSTITUTE ANY GUIDELINES OR RECOMMENDATION ON ANY COURSE OF ACTION TO BE FOLLOWED BY THE READER. THIS INFORMATION IS MEANT FOR GENERAL READING PURPOSES ONLY AND IS NOT MEANT TO SERVE AS A PROFESSIONAL GUIDE FOR THE READERS."

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
  • CONNECT WITH US
Top