What is One Time Machine? Advantages and How it Works

Investing in mutual funds can be a great way to grow your money. However, managing payments can sometimes be a hassle. This is where One Time Mandate (OTM) comes in. OTM makes it easy to automate your mutual fund payments. 

This blog will explain OTM, how it works, its benefits, and how you can set it up. Let’s make mutual fund investing simple and stress-free!

What is OTM? 

OTM stands for One-Time Mandate. It’s a simple way to automate your mutual fund payments. Think of it as giving permission for your bank to automatically pay for your mutual fund investments from your account.

When you invest in mutual funds, you need to pay regularly. This can be monthly, quarterly, or as per your investment plan. Managing these payments can be a hassle. With OTM, you don’t have to worry about missing a payment. Once you set it up, your payments will be made automatically.

OTM is beneficial for investors. It ensures that your investments are always on track, even if you need to remember to make a payment or are busy. It saves time and effort because you don’t have to make payments every time manually. Plus, it reduces the chances of errors since the process is automated.

Another great thing about OTM is that it’s secure. The banking system uses robust security measures to ensure your money is safe. You only need to authorise the mandate once; after that, the transactions happen without any additional input from you.

OTM is beneficial if you have multiple mutual fund investments. Instead of keeping track of different payment dates, you can relax knowing that the payments will be made on time. This consistency can help you achieve your financial goals more effectively.

Advantages of OTM

OTM offers several advantages that make investing in mutual funds more accessible and efficient. Here are they:

Convenience and Time-Saving

One of the best things about OTM is how convenient it is. Once you set it up, you don’t have to remember to make payments each month. The bank takes care of it for you. This saves you time and effort. 

Instead of logging in to your bank account or writing checks every month, OTM does it all automatically. This allows you to focus on other essential things in your life while your investments continue smoothly.

Here’s a comparison of manual payments and OTM:

Reducing Manual Errors

When you make payments manually, there’s always a chance of making mistakes. You might enter the wrong amount or forget to pay on time. With OTM, these manual errors are reduced. 

The automated system ensures that the correct amount is deducted and transferred to your mutual fund account every time. This accuracy helps you stay on track with your investment goals without worrying about errors.

Ensuring Timely Investments

Consistency is vital when it comes to investing. Regular, timely investments can help you build wealth over time. OTM ensures that your payments are made on time, every time. You don’t have to worry about missing a payment due to a busy schedule or forgetfulness. This timely investment helps you take full advantage of compounding, where your investments grow over time, leading to better returns.

Security Features

Security is a significant concern when it comes to financial transactions. OTM is designed with solid security features to protect your money. Banks use encryption and other advanced technologies to ensure the safety of your information and transactions. 

When you set up OTM, you authorize the payments once, and the system securely handles the rest. This reduces the risk of fraud or unauthorised transactions.

How Does OTM Work?

OTM, or One Time Mandate, is designed to make your mutual fund investments easy and stress-free. Here’s how it works:

Step-by-Step Process:

1. Setup
   • First, you need to register for OTM with your bank. You can do this online through your mutual fund company’s website or by filling out a form offline.
   • You’ll provide your bank details and sign the mandate form. This form permits your bank to deduct the specified amount for mutual fund payments from your account.
2. Authorisation
   • Once you submit the form, your bank will process it. They will verify your details and set up the mandate. This might take a few days.
   • After verification, you’ll receive a confirmation that your OTM is active.
3. Automatic Payments
   • After your OTM is set up, payments will be automatic. For example, if you invest ₹5,000 monthly in a mutual fund, the bank will automatically transfer this amount from your account to the mutual fund on the specified date.
   • You don’t need to initiate the payment each month manually. The bank handles it for you.

Imagine you decide to invest ₹5,000 every month in a mutual fund. You set up an OTM with your bank. Every month on a fixed date, say the 5th, your bank will automatically transfer ₹5,000 from your account to your mutual fund. You don’t have to remember the date or worry about missing a payment.

How to Register for OTM

Registering for OTM (One Time Mandate) is a simple process. Here’s how you can do it:

1. Choose Your Method: Decide if you want to register online or offline.
2. Fill Out the Form: Complete the OTM registration form with your bank details.
3. Submit the Form: Send the form to your mutual fund company or bank.
4. Verification: Wait for your bank to verify and activate the mandate.
5. Confirmation: Once verified, you’ll get a confirmation that your OTM is set up.

Online Registration Process: Registering for OTM online is convenient and fast. Here’s how:

1. Log In: Visit your mutual fund company’s website and log in to your account.
2. Find the Form: Look for the OTM registration form. It’s usually under the payments or services section.
3. Fill Out the Details: Enter your bank account details, such as account number, IFSC code, and the amount to be debited.
4. Submit: After filling in the details, submit the form online.
5. Verify: Your bank will process the request. You should complete a quick verification process, like receiving an OTP (One-time password) on your phone.
6. Confirmation: Once the bank verifies, you’ll receive a confirmation message or email.

Offline Registration Process: If you prefer offline registration, follow these steps:

1. Get the Form: Visit your mutual fund company’s office or download the OTM form from their website.
2. Fill Out the Form: Enter your bank account details and the amount to be debited.
3. Sign the Form: Sign the form to authorise the mandate.
4. Submit: Submit the form to your mutual fund company or bank branch.
5. Verification: The bank will verify the details. This might take a few days.
6. Confirmation: Once verified, you’ll receive a confirmation.

Documents Required:

• Bank account details (account number, IFSC code)
• A cancelled cheque (for verification purposes)
• ID proof (like PAN card or Aadhaar card)

Conclusion 

OTM is an excellent tool for anyone looking to simplify their mutual fund investments. It saves time, reduces errors, and ensures your investments are always on track. You can take advantage of this convenient feature by following the easy registration process. Start using OTM today and make your mutual fund investments hassle-free!