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Tata Capital > Blog > Benefits of Using e-NACH Mandate for Your SIP Investment

Benefits of Using e-NACH Mandate for Your SIP Investment

Benefits of Using e-NACH Mandate for Your SIP Investment

Is there a way to reduce the processing time for SIP registrations? Yes, through the e-NACH mandate facility for Systematic Investment Payment (SIP), you can! This facility, also called One Time Mandate (OTM), works like a charm in simplifying the registration and subsequent transaction process for SIP investments.

With OTM activated successfully, you can transact in a secure and paperless manner, without needing to sign multiple cheques or knock on the registrar's doors. Here's how.

The registration process is entirely digital

With a digitised end-to-end registration process, you can file for SIP registration and reap the following benefits:

  • Reduced time – Since the overall registration process happens online, there are no physical touchpoints. You're not mandated to sign forms offline, compressing the registration cycle from a tedious 30 days to a mere 2-3 working days only. Besides, the steps involved are simple and only need to be done once, so you can start investing sooner.
  • Automate transactions – With the OTM facility, you can issue a debit mandate for a fixed amount, which will be debited safely from your bank account monthly and credited towards your SIP portfolio without default. This ensures you're always on track and never miss out on a monthly payment while also encouraging financial discipline.

Additional Read: How Much Should I Invest in SIP? 

There is a reduced margin of error

Down the line, if you'd like to open a subsequent SIP scheme, you can register for it under the same OTM. Just make sure the aggregate value of your combined SIPs isn't above the specified mandate limit, and you're good to go.

OTM facility eliminates the need to fill out multiple auto-debit instruction forms or provide cancelled cheques.

Besides, unlike the OTM service, several things could go wrong if you opt for a physical mandate.

  1. There could be physical delays due to the mishandling of the form.
  2. Offline NACH forms usually involve signatures. If there are any discrepancies or overwriting in the form, the process gets delayed further.

Most of these errors can be eliminated using OTM services, so you can condense the registration cycle and start mutual fund investments as early as seven days from the registration date.

There are also lower regulatory and payment failure concerns since the National Payments Corporation of India (NCPI), regulated by RBI, overlooks this electronic system. So even if there's a technical glitch, you can rest assured of a successful transaction.

Things to remember

  • Also, your bank must be National Payment Council of India (NPCI) registered to avail of OTM.
  • Presently, the OTM facility is only available for investors holding the fund in single or solo mode. Joint investors are excluded from the beneficiary group.
  • As of now, you're only permitted to make investments of up to Rs. 10 lakhs via the OTM facility.

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

The bottom line

OTM facility is one of the most convenient, seamless, and quickest ways for SIP investment. If you're scouting the web to find the perfect SIP scheme for your investment goals, look nowhere else. With Tata Capital's Moneyfy app, now find all your SIP related information in the same place. Download today!

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