Advantages of a One-Time Mandate in SIP

 Investing in Mutual Funds through a Systematic Investment Plan (SIP) is a great way to build wealth over time. However, making monthly payments manually can be time-consuming and may lead to missed transactions. This is where a one time mandate (OTM) helps. OTM allows automatic SIP deductions from your bank account, eliminating the need for repeated approvals. Once set up, your SIP investments continue seamlessly. In this blog, we’ll explain what is OTM in Mutual Funds and its key benefits, helping you simplify your investment process and ensure hassle-free wealth creation.

What Is One Time Mandate?

A one time mandate is a facility that allows investors to authorise the bank to debit a fixed amount at regular intervals for SIP investments. This eliminates the need to approve transactions each time. With this mandate, the investment process becomes seamless and automated.

Advantages of a One-Time Mandate in SIP

Here are the key benefits of using one time mandate in SIP:

1. Convenience and Automation

One of the biggest advantages of a one time mandate is convenience. Investors don’t have to manually make payments every month. The ICICI Bank automatically deducts the specified amount from the account on the chosen date. This ensures timely investments without any manual intervention.

2. Eliminates the Risk of Missed Payments

Forgetting to make an SIP payment can affect an investment plan. With a one time mandate, payments are automatically deducted, reducing the risk of missed payments for SIPs. This helps maintain consistency in investment and ensures financial discipline.

3. Saves Time and Effort

Manually processing SIP payments every month takes time. Setting up a one time mandate saves this effort. Once the mandate is approved, the process runs smoothly without requiring monthly approvals, making investing effortless.

4. Flexibility to Invest in Multiple SIPs

Investors can use a single OTM for multiple SIPs. This means they don’t have to register for each SIP separately. It provides flexibility and simplifies the investment process, especially for those investing in multiple Mutual Fund schemes.

5. Better Financial Discipline

Many investors do not invest regularly due to the effort required to remember and transfer funds on the due date. With an automated system in place, SIPs continue without interruption, promoting a habit of regular investing. Over time, this disciplined approach helps in achieving long-term financial goals.

6. Ensures Timely Investments

With a one time mandate, SIP payments are debited automatically on the due date. This ensures that investors never miss an instalment, keeping their financial goals on track. Timely investments help in benefiting from market growth and compounding over time.

7. Security and Reliability

The one-time mandate is a safe and secure way of making SIP payments. ICICI Bank ensures that all transactions follow strict security protocols. This eliminates the risk of fraud and unauthorised transactions, making it a reliable option.

8. Reduces Manual Errors

When making manual payments, there is always a risk of entering incorrect details, leading to failed transactions. A one time mandate eliminates these risks as payments are automated and pre-authorised. This reduces errors and ensures smooth transactions.

9. Automatic Mandate Setup

If you start a SIP through your ICICI Bank Savings Account, you don’t need to complete any OTM registration. The mandate is automatically set up when you make your SIP payment for the first time, making the process quick and hassle-free.

Who Should Opt for a One-Time Mandate?

A one time mandate is a convenient option for investors who want to simplify their SIP transactions. It eliminates the need to manually approve payments each month, ensuring a seamless and hassle-free investment experience. OTM is particularly beneficial for:

• Busy Professionals- Those with hectic schedules who may forget or lack time to make monthly SIP payments. OTM ensures timely deductions, preventing missed investments.

• Investors with Multiple SIPs- Instead of managing multiple approvals, OTM allows a single mandate for all SIP transactions, making portfolio management easier.

• First-Time Investors- New investors who want an effortless way to start investing in Mutual Funds without worrying about manual payments each month.

• Long-Term Investors- Investors committed to consistent wealth creation who prefer automated investments to maintain financial discipline and achieve their financial goals.

SIP and OTM: The Perfect Investment Combo

SIP and a one time mandate together create an ideal combination for effortless wealth creation. While SIP promotes disciplined and consistent investing, OTM ensures seamless automation, making investments stress-free.

• Disciplined Investing- SIPs encourage regular contributions, helping you stay on track with your financial goals.

• Rupee Cost Averaging- Investing at different market levels balances market fluctuations.

• Power of Compounding- Long-term SIPs maximise returns through compounding.

• No Payment Hassles- OTM automates SIP deductions, avoiding missed payments.

• Flexibility & Convenience- Modify SIP amounts or add funds without extra approvals.

Together, SIP and OTM simplify investing, making wealth-building easy and efficient.

Conclusion

A one time mandate simplifies SIP investments by automating payments, eliminating manual transactions, and ensuring financial discipline. It provides a secure, convenient, and reliable way to invest consistently without worrying about missed payments. Setting up an OTM is easy and helps investors stay committed to their financial goals. For ICICI Bank account holders, the process is even simpler. If you start an SIP through your ICICI Bank Savings Account, you don’t need to register separately for OTM. The mandate is automatically set up when you make your first SIP payment, making the process quick and hassle-free.

With a well-planned SIP and a one time mandate, investors can systematically grow their wealth, achieve financial stability, and work towards long-term success in Mutual Fund investments.

For disclaimer, Click here