Is One Time Mandate safe?
OTM, or 'One Time Mandate' is a one time registration process that will allow you to invest with a mutual fund in a simple, convenient and paperless manner
By Research Desk | Nov 26, 2015
I am getting offers to register One Time Mandate from both the AMCs I have invested in and the associated KRAs. Is this OTM registration to be done at the bank level, KRA level or AMC level? Is it safe? Should retail investors like me opt for it?
- Amit Tailor
OTM, or 'One Time Mandate' is a one time registration process that will allow you to invest with a mutual fund in a simple, convenient and paperless manner. Simply put, it is an authorization to your bank account to debit money up to a certain limit in a day to a mutual fund of your choice. You can use this facility whenever you are transacting with the mutual fund.
Once you opt for the OTM facility, you will never need to fill an investment form with the mutual fund again, especially a cheque. Any transactions in your folio will happen only based on your instruction to the mutual fund. The OTM form will allow you to indicate the maximum daily amount you are comfortable investing without a cheque.
Since it involves your bank and mutual fund, your transactions should be safe. You can opt for it if you want the convenience of investing in a mutual fund of your choice without going through the same formalities again and again.