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Business News/ Money / Calculators/  Product Crack: One Time Mandate by DSP BlackRock
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Product Crack: One Time Mandate by DSP BlackRock

OTM has little relevance if you invest through online MF transaction platforms

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Every time you invest in a mutual fund (MF), you need to give a cheque along with your application form. DSP BlackRock Investment Managers Ltd has introduced a new facility called one time mandate (OTM) today, wherein you need to register your bank account just once. Thereafter, every time you invest, you don’t need to issue cheques. Fill in the OTM form (a one-time exercise), give a cancelled cheque, set your daily spending limit (for future systematic investment plan, or SIP, and one-time investments) and your bank account gets registered with the fund house with a specific folio. Thereafter, when you invest, just fill and submit the form, money will move out of your bank account and your investment is done. It has tied up with National Automated Clearing House and piggybacks on its technology to offer OTM.

What works?

Presently, when you invest in a fund through an SIP you need to submit a cancelled cheque. It takes about 20 days for the fund house to register your SIP mandate. Any mistake such as signature mismatch, and your application comes rejected after a month. Once your OTM mandate is registered, any new SIP takes just five days to register because your mandate has already been registered. With OTM you also save on your cheque leaves. OTM also allows you to invest in the fund by sending text messages or by phone. Once you call (from your registered mobile phone), the fund house will verify your identity and process your investment once it is satisfied. Although at any given time, one OTM is considered the default one, you can register as many OTMs as you want in a single folio. The last registered OTM will be the default one. But if you wish to invest from an earlier-registered bank account, just mention your bank account number under the OTM option in your application form and money will go out from that bank account only.

What doesn’t?

OTM is meant only for existing investors as you need to attach OTM to a particular folio. OTM allows you to fix a daily limit that you can invest in any of DSP BlackRock’s schemes. Any excess investments and you will need to issue a cheque for the excess amount. But if you put a large, one-time investment amount on a day other than your SIP payment date, the entire OTM daily limit gets available to you, because under OTM you fix the daily spending limit. Further, OTM works on a single folio level, so if you have multiple folios, you will need to register as many OTMs.

Mint Money take

OTM has little relevance if you invest through online MF transaction platforms. Even for physical investments, OTM has limited benefits as it’s only offered by DSP BlackRock. But it still makes sense to do OTM if you are an investor at DSP BlackRock. To make the most out of OTM, it’s best to consolidate your folios.

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Published: 13 Dec 2013, 06:24 PM IST
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