Are you interested in growing your wealth but find traditional investment methods difficult? If so, then a mutual fund might be the perfect solution for you.
What are Mutual Funds?
A mutual fund is a type of investment that pools money from many investors and invests it in a variety of assets, like stocks and bonds. A professional manager, then uses that money to buy different investments on behalf of all the contributors (investors) like you. This approach allows you to gain exposure to a diversified portfolio of investments without having to pick individual stocks or bonds yourself.
What is OTM in Mutual Fund?
OTM stands for One Time Mandate in mutual funds. It's a one-time registration process where you allow your bank to deduct a certain amount from your savings account for investing in a specific mutual fund scheme.
One Time Mandate (OTM) in mutual funds covers the following transactions:
- Fresh Lump-Sum Investments:
You can use your bank account to make payments for lump-sum investments. The amount will be debited based on the fixed limit set in your OTM form.
- New Systematic Investment Plans (SIPs):
You can start new SIPs through the OTM service. There's no need to provide bank details or a canceled cheque again.
Duration of OTM: You can set up an OTM for a specific period, like five years, or keep it active until you decide to cancel it.
Overall, OTM is a convenient way to invest in mutual funds regularly and grow your money over time.
How Does OTM Work?
Once you set up an OTM, your bank will deduct the specified amount from your account based on requests from the mutual fund company. These requests come from investors like you who want to invest in the mutual fund scheme. This eliminates the need for manual payments every time you want to invest.
To register for a One Time Mandate (OTM), the process is straightforward. Follow these steps:
- Complete OTM Form: Fill out the OTM form with your personal and financial information.
- Bank Account Details: Provide details such as your bank's name, branch, account number, type, and IFSC code. Remember, only one bank account can be used for OTM registration.
- Personal Information: Include your name, date of birth, PAN number, address, phone number, and email ID. If the bank account is joint, provide details for other account holders too.
- Set Mandate Limit: Specify the maximum amount that can be debited. Transactions exceeding this limit will be rejected.
- Investment Preferences: Share your folio number and choose between fixed or maximum debit options. Decide the frequency of debits – monthly, quarterly, half-yearly, or as needed.
- Signature: All account holders must sign the OTM form. Ensure the signatures match those on file with the bank.
After submitting the form, the bank will process your request. Once approved, you can start using the OTM facility for mutual fund investments.
Benefits of OTM:
- Convenience: OTM makes investing in mutual funds easy and hassle-free. You don't need to attach a cheque or go through a payment gateway each time you invest.
- Paperless and Electronic: It's a digital process, so you don't have to deal with paper forms or documents.
- Automatic Investing: OTM automates your investments, helping you build wealth over time without having to remember to invest manually.
How do I register for OTM?
Contact your bank. They will provide you with an OTM form to fill out. The form will ask for your personal information, bank details, and investment preferences.
Is OTM safe?
OTM is a secure process because it involves your bank and a registered mutual fund company.
Can I cancel OTM once I register?
Yes, you can cancel OTM at any time by contacting your bank.
What if I forget my folio number?
Your folio number is your unique identification number for your mutual fund investment. You can find it in your account statements or by contacting the mutual fund company.
.webp)
.png)
.png)
