OTM full form is ‘One Time Mandate’ – It is a one-time registration process to be done by the mutual fund investor wherein the investor authorizes his/her banker to execute debits to his bank account up to a certain limit based on requests received from the mutual fund company. The Asset Management Company or registrar shall forward the debit request to the bank based on the transaction request made by the investor for a lump sum or SIP purchase in a mutual fund scheme. The debits happens through NACH, the full form of which is National Automated Clearing House.
Investing in Mutual Funds can be simple, quick and efficient, especially if it is done online by investors. When the investor has decided the fund to be invested in, the rest of the process is only a matter of a few clicks. In order to make it easier, OTM in mutual fund comes into the picture.
We discussed OTM meaning. Let us understand how the investor can register OTM.
Reduction in registration time compared to ECS which is around 30 days. It facilitates future payments without any instrument (cheque or demand draft)
Yes, an OTM can be registered by individual as well as corporate.
Yes, it can be. The option is provided in the OTM form.
Yes it can, if you provide incorrect details. It can also get rejected if your bank is not participating in NACH.
There is no limit for this except that the total amount of your various SIPs should not exceed the maximum limit amount for the OTM.
Yes, you can register multiple bank OTM in a single folio. You have to submit separate OTM forms for each of the banks.
Any transaction under OTM facility will be treated at par with similar transactions received through any other mode as per the SEBI Regulations on allotment of NAV.
No, there is no need of cancelled cheque each time when SIP is registered as you have already submitted the cancelled cheque along with the mandate form.
Both, SIP and lump sum transaction can be initiated by using the OTM. You only need to keep the daily total transaction amount within the upper limit applied in the OTM.
We discussed OTM meaning in mutual funds, what is OTM, how you can register an OTM and its benefits. As a mutual fund investor, you must have an OTM with the AMC you are investing with as it provides a seamless experience in making payments to the mutual fund house for your lump sum and SIP investments.
An Investor Education and Awareness Initiative by Mirae Asset Mutual Fund.
For information on one-time KYC (Know Your Customer) process, Registered Mutual Funds and procedure to lodge a complaint in case of any grievance Click Here.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.