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    Aditya Birla Sun Life AMC Limited

    OTM in Mutual Funds

    Sep 25, 2022
    5 min | Views 2453

    OTM full form in mutual fund is ‘One Time Mandate’. It is a one-time registration process wherein you authorize your bank to deduct a certain amount from your savings account towards the purchase of units in a particular scheme of a mutual fund. The debits are made by the bank based on requests received from the asset management company which receives transaction requests from investors. You can provide this mandate for a set period (for example, five years), or it can remain active until you cancel it.

    OTM facility helps you invest in mutual funds smoothly by automating regular investments. It is a paperless, electronic mode of operation. It eliminates the trouble of attaching a cheque or routing the payment through a payment gateway, as well as remembering your debit card or net banking information. It is a convenient way to invest in mutual funds and build your wealth over time.

    How Can an Investor Register for OTM?

    The registration process for a one-time mandate is simple. All you have to do is fill out the OTM form and provide your personal and financial details. Here’s how you can register for OTM:

    1. Bank Account Details

    Provide your bank account details like your bank name and branch, bank account number, bank account type, IFSC code, etc. The OTM must be registered using a single bank account.

    2. Personal Details

    Provide your personal details like name, date of birth, PAN number, address, phone number, e-mail ID, etc. In case you have a joint bank account, you need to provide the details of other account holders as well.

    3. Mandate Limit

    Specify the maximum amount that can be debited through this platform. If any transaction exceeds the mandated limit, it will be rejected.

    4. Investment Details

    Share your folio number and choose between two debit options: fixed amount, which is perfect for regular investments like SIP, or maximum amount for one-time lumpsum payments. You can also set the frequency of the debits for your funds, i.e. monthly, quarterly, half-yearly, or as needed.

    5. Signature

    All bank account holders need to sign the OTM form. The signatures in the OTM form must match with the signatures available in the bank records.

    Once you submit the form, the bank will process your request. Once that is done, you will be able to use the OTM facility to make investments in mutual funds.

    Benefits of OTM in Mutual Funds

    OTM in mutual funds offers the following benefits:

    • It is a simple registration process, which can be done in a few easy steps
    • It is a one-time process with no follow-up procedures. Once you give your consent, the money transfers are done automatically and regularly for the given time frame.
    • OTM works for both lumpsum and SIP transactions.
    • You can enjoy an easy setup of investment within a few days of OTM.
    • Since transactions are processed on a real-time basis, your funds are realised on the day of the transaction which means you have a high chance of getting the units allotted on the same day.
    • There is no limit to the number of SIPs you can register under a single OTM. Just make sure, that the total value of all SIPs should not exceed the specified mandate limit.
    • OTM automates money transfer thus instilling discipline in your investments.
    • OTM facility ensures increased safety in transactions.
    • It ensures lesser chances of transaction failure.

    Transactions Covered under One Time Mandate OTM in Mutual Funds

    • Fresh Lump-Sum Investments

      You can easily pay for your lump-sum investments using your bank account. The payment will be processed according to the fixed limit mentioned in the OTM form.

    • New SIPs

      You can start investing in new SIPs with the OTM service. It is a smooth and convenient process as you need not resubmit your bank details or cancelled cheque.

    Conclusion:

    One Time Registration (OTM) registration in a mutual fund is a safe process involving your bank and mutual fund. Experience the ease of investing in a mutual fund of your choice without having to go through the same formalities over and over. Register for your online OTM at the earliest.

    Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

     

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    FAQ's

     

    Registrations for OTM are quicker compared to ECS, which typically takes around 30 days. Moreover, OTM simplifies all future payments by eliminating the need for cheques or demand drafts.

    Yes, OTM can be modified. All you have to do is fill out another OTM form with modified details and resubmit it.

    Yes, your OTM can get rejected if you provide incorrect information or if your bank is not part of the National Automated Clearing House (NACH).

    No, OTMs are for safe transactions between your bank and the AMC. The eotm is only meant to make your transactions seamless till the limit you have set, so that you do not have to go through any other formalities till you exhaust the amount decided. Before every transaction, the OTM has to be authorised by you through an OTP based process.

    Yes. You can register online for OTM. Once verified by the bank, subsequent SIPs can be cleared through OTM.

    Yes, as far as these SIPs are for the same folio in a single AMC. You will need separate OTMs SIPs transacted through different folios or different AMCs.

    You can increase your OTM limit. However, you will have to submit a fresh OTM application. To avoid extra procedure, it is advisable to set a high OTM limit when registering for it.

    OTM is valid for the time specified by you or for an infinite period till you cancel it. You OTM can be cancelled online through the portal of the AMC or the bank.

    Yes, the same OTM can be used for both SIP and lumpsum investments if the investment is for the same folio with the same AMC and within the OTM limit.

    You will have to cancel your old OTM and register a fresh OTM with your new bank. Please note that this is possible only if your new bank is also a participating bank for OTM facility.



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