Benefits of One - Time Mandate For SIP Investment

One Time Mandate (OTM) for SIP investments make things easier by automating your payments, saving you time and hassle. With this feature, you can set up your investments effortlessly and focus on growing your wealth.

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SIP Benefits
Start SIP with as low as ₹1000
Start SIP with as low as ₹1000
No hidden charges
No hidden charges
Save upto ₹46,800 in Tax
Save upto ₹46,800 in Taxunder section 80 C
Zero LTCG Tax
Zero LTCG Tax^ (Unlike 10% in Mutual Funds)
Disciplined & worry-free investing
Disciplined & worry-free investing

  • Insurance Companies
  • Mutual Funds
Returns
Fund Name 3 Years 5 Years 10 Years
Top 200 Fund Tata AIA 26.56% 26.54%
20.86%
View Plan
Virtue II PNB Metlife 24.33% 22.69%
18.63%
View Plan
Pure Equity Birla Sun Life 22.64% 18.83%
17.7%
View Plan
Growth Opportunities Plus Fund Bharti AXA 19.93% 18.63%
17.36%
View Plan
Pure Stock Fund Bajaj Allianz 19.11% 17.33%
17.09%
View Plan
Blue Chip Fund HDFC Standard 15.73% 14.59%
14.41%
View Plan
Growth Super Fund Max Life 16.34% 15.13%
14.21%
View Plan
Multi Cap Growth Fund ICICI Prudential 17.16% 13.44%
13.72%
View Plan
Equity Fund SBI 16.39% 14.54%
13.61%
View Plan
Equity II Fund Canara HSBC Oriental Bank 15.5% 12.24%
11.85%
View Plan

Updated as on February 2024

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  Returns
Fund Name 5 Years 10 Years RSI
Active Fund QUANT 27.80% 23.96%
21.08%
Large and Mid Cap Fund QUANT 23.27% 22.69%
19.64%
Flexi Cap Fund PARAG PARIKH 23.90% 20.22%
20.15%
Large and Mid Cap Fund EDELWEISS 20.32% 18.01%
16.76%
Equity Opportunities Fund KOTAK 20.22% 18.98%
17.44%
Large and Midcap Fund MIRAE ASSET 21.11% 24.56%
23.01%
Flexi Cap Fund PGIM INDIA 21.48% -
15.13%
Flexi Cap Fund DSP 19.48% 17.73%
15.82%
Emerging Equities Fund CANARA ROBECO 18.91% 22.92%
20.84%
Focused fund SUNDARAM 18.22% 16.55%
15.16%

Updated as on March 2024

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What is OTM for SIP?

One Time Mandate (OTM) for SIP (Systematic Investment Plan) investments is a facility provided by financial institutions or mutual fund companies that allows you to set up an automatic debit mandate for your SIP investments.

With an OTM, you authorize your bank or financial institution to debit a predetermined amount from your bank account at specified intervals (usually monthly) and invest that amount in a selected market-linked fund scheme through best SIP plans. This eliminates the need for manual payments for each SIP instalment, making the investment process more convenient and hassle-free for you.

What are the Benefits of OTM in SIP?

OTM (One Time Mandate) in SIP offers several benefits that can make your investment journey smoother and more disciplined: 

  • Convenience: OTM automates the payment process, saving you the hassle of manually transferring funds for each SIP instalment.

  • Time and Effort Saving: Once OTM is set up, it relieves you from arranging subsequent payments. It allows you to focus on other tasks.

  • Discipline: It helps in maintaining investment discipline by ensuring regular contributions to SIP without the need for constant monitoring.

  • Timeliness: OTM ensures timely payments, reducing the risk of missing SIP instalments and helping you stay on track with your investment goals.

  • Cost-Effectiveness: By automating the payment process, OTM reduces the likelihood of incurring penalties or charges for missed payments.

  • Flexibility: Investors can easily modify or cancel their OTM instructions as per their changing investment needs and financial situations.

How OTM in SIP Works?

  • Use an SIP calculator to estimate your investment amount, tenure, and expected return based on your financial goals.

  • Choose the best SIP plan for your SIP investment.

  • Set up an OTM with your bank for the SIP amount and desired investment frequency (monthly, quarterly, etc.). This ensures automatic deduction and investment.

Steps to Automate Your SIP Plans

OTM (One Time Mandate) automates payments in the SIP Plans. It ensures timely investments without manual intervention. You can set up OTM in SIP through the following two popular methods:

Method 1: Online Banking

Step 1- Login: Access your net banking portal using your credentials.

Step 2- Locate SIP options: Look for sections like "Bill Pay," "Auto-Pay," or "Standing Instructions." These options might be under "Payments" or "Investments."

Step 3- Set up SIP: Choose "Market-Linked Investment Funds" or "SIP" as the payment category.

Step 4- Fill in details: Provide your fund provider's details, SIP folio number, desired SIP amount, and start date.

Step 5- Link bank account: Select the savings account from which you want the SIP to be deducted. You might need to enter your bank account details if not already linked.

Step 6- Activate OTM: Confirm and activate the OTM registration following on-screen instructions. The bank will verify the mandate with your chosen account.

Method 2: Offline Form

Step 1- Download the form: Get the OTM form from your fund provider's website or collect it from a branch.

Step 2- Fill out the details:

  • Enter your bank account details (account number, IFSC code).

  • Mention the SIP folio number or application number.

  • Specify the SIP amount and preferred start date.

  • Choose the OTM validity (usually "until cancelled").

  • Sign the form, ensuring it matches your signature on record with the bank.

Step 3- Submit the form: Submit the completed OTM form in person at:

  • Your bank branch.

  • Your market-linked fund provider's office.

In Conclusion

The One Time Mandate for SIP offers a streamlined and convenient approach to investing, providing benefits such as hassle-free transactions, reduced paperwork, and enhanced efficiency. OTM promotes disciplined saving and ensures consistent investment by enabling automatic deductions. Ultimately, it empowers you to achieve your financial goals with ease.

FAQ's

  • What is a one-time mandate for SIP?

    A one-time mandate (OTM) for SIP is a one-time registration process. You instruct your bank to automatically deduct a specific amount from your savings account at regular intervals. This money is then credited towards your SIP investment. Essentially, it automates your SIP contributions, eliminating the need to manually initiate payments each time.
  • Is one-time SIP better?

    SIP itself is a better way to invest compared to a lump sum investment for most people due to rupee-cost averaging. However, OTM is not a type of SIP but a method to automate your SIP contributions. It offers convenience and ensures you do not miss any instalments due to forgetfulness.
  • Is a mandate necessary for lumpsum investment?

    No, a mandate is not required for a lump sum investment. Since it is a one-time transaction, you can simply initiate the investment directly through your net banking or investment platform.
  • Which is better, OTM or Biller, for SIP?

    OTM and biller are both methods for automating SIP contributions. The following breakdown will help you choose:
    • OTM: Offers more control. You directly instruct your bank, so there is no need to involve a third party (biller).

    • Biller: It might be faster to set up, especially if done electronically through your investment platform. However, it relies on the biller (fund house) to initiate the debit, which could lead to delays.

  • Are OTM options more profitable?

    OTM itself does not impact profitability. The profitability of your SIP depends on the chosen market-linked fund scheme's performance in the market. OTM simply ensures disciplined investing by automating your contributions.

+For Mutual Fund midcap category Returns https://www.morningstar.in/tools/mutual-fund-category-performance.aspx & for Insurance midcap fund category Returns- https://www.morningstar.in/tools/insurance-fund-category-performance.aspx
*Past 10 Year annualised returns as on 01-12-2023
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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