Benefits of a One-Time Mandate in SIP

3 mins read
by Angel One
Keeping track of your SIP dates can be tedious. Find out how a one-time Mandate can help you streamline the process and make your investing hassle-free.

SIP is a Systematic Investment Plan where you can choose to invest in mutual funds periodically – monthly, quarterly, or annually. This method reduces the impact of market volatility and is a great way to build wealth through contributions.

The Systematic Investment Plan (SIP), after the first payment, requires subsequent payments in periodic intervals. This task can become tedious, and time-consuming, and requires constant calendar monitoring. A One-Time Mandate automates the subsequent payments from your account, thereby reducing the pressure of making timely investments manually.

What Is a One-Time Mandate in SIP?

One-Time Mandate (OTM) in SIP refers to an automated process where your funds are deducted from the selected bank account and credited to your investments. The process requires a one-time registration process, after which the subsequent contributions shall be made to your SIPs in due time.

You can choose any date of the month, quarter, or year for the deduction. This process helps by reducing the risk of payment failure, better cash flow management, and saving time and effort. 

Benefits of OTM

Let’s look at how using an OTM can help you in contrast to manual payments:

a. Time and Effort savings

With the help of an OTM, you can allocate your time and effort to other tasks instead of worrying about the timely payment of SIPs. Since OTM is an automated process, it does not require constant monitoring.

b. Cost-effective

OTM can help reduce the risk of payment failure, thereby saving funds by steering clear of late penalties and charges. However, you must make sure that, before payment is due, the bank account has sufficient funds for the contribution.

c. Convenient

Compared to manual payments, a one-time mandate is comparatively more convenient. In addition, an OTM can be set up quicker online than an offline process.

What Can OTM Be Used For?  

One-time mandate facility, although widely used for timely SIP payments, can help you in the following ways too:

1. Fresh Lump Sum Payments

A new investment can be made hassle-free by investing using OTM. Contributions can be made in compliance with the OTM form’s fixed limit.

2. New SIPs

The investor can initiate new SIP contributions using OTM without any additional paperwork. The one-time mandate remains a single-time registration process despite initiating new investments.

Wrapping Up!

With advancements in technology and automation of processes, the investment procedures have also been simplified. Having a vast portfolio of investments is no longer the hassle it used to be. OTM, being one of the automation, takes care of your timely payments of SIP. It reduces the stress and anxiety of maintaining your payments. 

Ready to watch your savings grow? Try our SIP Plan Calculator today and unlock the potential of disciplined investing. Perfect for planning your financial future. Start now!

By utilising the various facilities available, you can start your investment journey and maintain it seamlessly. Get some of the best features at your fingertips at Angel One! Open your Demat account with Angel One and explore the features offered.

Disclaimer: This article has been written for educational purposes only. The securities quoted are only examples and not recommendations.