What is OTM in Mutual Funds?

OTM, or One Time Mandate, is a simple registration process for mutual fund investors. By completing this process, you authorize your bank to debit your account up to a specified amount for mutual fund investments. This makes investing in mutual funds quick and easy, especially online.

Once registered, you can set up a standing order with your bank to automatically credit your mutual fund SIP account at regular intervals. This ensures timely and hassle-free investments throughout your investment journey.

Example: Suppose you want to invest INR 5,000 monthly in a mutual fund SIP. By registering an OTM, you instruct your bank to automatically debit INR 5,000 from your account each month and credit it to your mutual fund SIP account. This way, you don't have to manually make the payment every month, ensuring timely investments.

Why Should You Set-Up One-Time Mandate?

The primary reasons to set up a one-time mandate are as follows.

? Convenience: Registering a mandate online is quick and easy, taking just a few minutes. It's a one-time process, so no need for frequent renewals.
? Discipline: Automatic SIP investments promote financial discipline, helping you achieve your financial goals.
? Reliability: OTM ensures reliable transfers to your mutual fund SIP account, with minimal chances of failure as long as your bank account has sufficient funds.
? Automation: Once set up, your investment amount is automatically transferred on the specified date, reducing the risk of missed payments and eliminating the need for manual transfers.

How can Investors Register OTM?

To register a One Time Mandate (OTM), investors need to follow these steps:
? Bank Account Details: Provide the bank name, account number, account type, and IFSC code for a single bank account.
? Personal Information: Enter your name, PAN number, address, phone number, and email address. If the account is joint, include details of other account holders.
? Upper Limit: Specify the maximum amount you allow to be transferred through OTM. Transactions will only occur within this limit.
? Investment Details: Provide the folio number or application number and the name of the asset management company.
? Period of OTM: Mention the timeframe for the mandate. You can also choose the default period of December 2099 or select 'until deleted.'
? Signatures: Sign the form along with other account holders, if applicable. Ensure your signature matches the one in your bank account.

Conclusion

Lastly, the smartest way to make sure that you stay on track with your investment is to establish a one-time mandate for your mutual fund SIP. However, it is important to remember that you need an appropriate balance in your bank account for the successful implementation of automated debits. Consider setting an exact date on which you are certain to have sufficient funds in your account to reduce the chance that this payment will fail.

FAQs on OTM in Mutual Funds

Is OTM mandatory for SIP?
An OTM for mutual funds or SIP refers to a once-registered process that enables the automatic transfer of investments into your SIP account. You must register an OTM with the Bank to allow automatic debits of an SIP amount from your savings account every month.

How do I activate OTM in mutual funds?
Investors must fill out and submit to any designated investor office or through a financial adviser the one-time mandate registration form. Current investors must provide their folio number and sign the OTM form correctly. The signature on the bank documents must match the OTM application.

This document represents the views of Axis Asset Management Co. Ltd. and must not be taken as the basis for an investment decision. Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its Directors or associates, shall be liable for any damages including lost revenue or lost profits that may arise from the use of the information contained herein. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The material is prepared for general communication and should not be treated as a research report. The data used in this material is obtained by Axis AMC from the sources which it considers reliable. While utmost care has been exercised while preparing this document, Axis AMC does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. The AMC reserves the right to make modifications and alterations to this statement as may be required from time to time.
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.