Benefits of One-Time Mandate in SIP: Autopay Option for SIP

Better protection against market volatility, affordability, and high earnings even during market lows are some of the major reasons investors choose to invest in Systematic Investment Plans (SIPs). However, selecting the desired scheme and making the first payment is easy, but your work isn't done there, that is until you opt for a One-Time Mandate or OTM. Essentially, this is an auto-pay option for an SIP through an eNACH mandate.

An OTM in SIP investing is a one-time registration process in which you instruct your bank to deduct a specific amount from your savings account and credit the same to your SIP portfolio at regular intervals. Once the OTM has been activated, your monthly SIP payments will be automated, relieving you of the task of transferring money ever so often.

The many benefits of OTM

• No worries regarding payment lags

Also known as the ‘e-wallet of investing,’ the One-Time Mandate is a safe process. Plus, being advanced and wholly digital, you will hardly (if ever) face any payment failures. This is way more convenient than having to fill out endless cheques or auto-debit instruction forms.

• Secure process

As stated earlier, SIP OTM is one of the safest ways to invest. You will be asked for information such as your bank account details and mutual fund details which makes the process secure and quick. OTM spares you time otherwise wasted in going through the same payment formalities over and over again.

Additional Read: Why are SIPs an Ideal Choice for the First-time Investor?

• No cap on the number of SIPs

With a single One-Time Mandate registration, you can automate payments for multiple SIPs. Though there is no cap on the number of SIPs that can be registered with a single OTM, you need to ensure that the aggregate value of all SIPs combined falls well within the specified limit.

• Instils financial discipline

Financial success isn't magic but engineering. It takes keeping your long-term goals always at the forefront, which requires tremendous willpower and effort. Sometimes, bending your will to do what's needed can feel like a losing battle. Since OTM automates payments at periodic intervals, it naturally instils a sense of financial discipline over time.

• Simple registration

Registering for an OTM in SIP is easy and quick. All you need to do is duly fill and submit an OTM form with your signature agreeing to the Terms and Conditions of this facility. It takes a maximum of 10 days for successful One-Time Mandate registration. An OTM can be set up for both new lumpsums and fresh SIPs.

Additional Read: Timed lump sums vs SIPs: What works better?

How to set up e-mandate for SIP

1. Download the Tata Capital Moneyfy app
2. Enter your details – PAN, email id, etc. – and choose your bank
3. Next, choose the mandate amount and the period for which you want it to be valid
4. Now, authenticate your Aadhaar details

It will take a couple of working days for the e-mandate to become effective.

Do you also want to start your SIP investment journey? Download Tata Capital’s Moneyfy app and get the ball rolling! Use the SIP calculator to determine the amount you'll need to invest to achieve your goals, get personalised fund recommendations for your portfolio, compare between funds, and start your SIP journey with as little as Rs.500.