One-time mandate—three words that could transform how you handle recurring payments. If you’ve ever struggled to keep up with multiple due dates or are worried about missing a payment, understanding OTM is essential. By simplifying the way your regular payments are managed, a one-time mandate helps ensure everything from utility bills to investment contributions is handled automatically, giving you more time to focus on what truly matters.
Understanding OTM
The one-time mandate is essentially a pre-authorisation that you provide to your bank, allowing them to debit your Savings Account automatically for recurring payments. It is especially beneficial for services that require periodic payments, such as insurance premiums, SIPs (Systematic Investment Plans), or subscriptions. Once an OTM is in place, it operates seamlessly in the background, ensuring that all your payments are made on schedule without requiring your active intervention each time.
The OTM meaning is quite simple—it's a one-time authorisation that makes recurring transactions easier and more efficient. By setting up an OTM, you not only save time but also avoid the stress of manually managing multiple due dates.
How does OTM work?
The OTM process begins with you providing your bank with a mandate. This mandate outlines the details of the payments, including the amount, frequency, and the account from which the funds will be debited. You can set this up through your bank's online platform or by submitting a physical form. Some banks may require you to verify the mandate via an OTP (one-time password) sent to your registered mobile number.
Once the OTM is set up, the specified amount is automatically debited from your Savings Account on the scheduled date.
For instance, if you set an OTM for a monthly payment of ₹2,000 towards your utility bills, this amount will be deducted from your account on the same day every month without requiring further action from you.
OTMs offer flexibility, allowing you to set upper limits on the amount that can be debited, which protects against unauthorised or unexpected transactions. Additionally, you can choose to stop or modify the OTM at any time by notifying your bank. This ensures that while your payments are automated, you remain in full control of your finances.
Key features of OTM
1. Automation: OTM automates your recurring payments, ensuring they are always made on time without manual intervention.
2. Flexibility: You can specify the payment frequency and amount, and even set a maximum limit on debits, providing you with control over your transactions.
3. Security: Banks use robust security measures to protect OTM transactions, including encryption and multi-factor authentication.
4. Convenience: Once an OTM is established, you no longer need to worry about missing payments, as everything is handled automatically.
5. Easy setup and management: Setting up an OTM is straightforward, and managing or cancelling it can be done easily through your bank’s online portal or mobile app.
Benefits of OTM
- Consistent timeliness: OTM ensures that your payments are automatically processed on time, every time, helping you avoid late fees and maintain good financial standing.
- Reduced financial stress: By automating recurring payments, OTM alleviates the mental load of remembering due dates, allowing you to focus on other important aspects of your life.
- Enhanced control: Despite its automation, OTM allows you to set limits on the maximum amount debited, giving you a strong sense of control over your outgoings and budget.
- Security and reliability: With OTM, transactions are processed through secure banking channels, ensuring that your payments are not only timely but also protected against fraud.
- Seamless financial planning: By automating fixed expenses, OTM makes it easier to plan your finances, helping you allocate funds for other goals without worrying about essential payments.
Process of implementing OTM
- Identify payment needs: Determine which recurring payments—like utility bills, loan EMIs, or investments—you want to automate. This helps prioritise your financial commitments.
- Obtain the mandate form: Get the OTM form from Axis Bank through their online portal or at a branch, ensuring it suits your specific payment requirements.
- Fill in details: Accurately complete the form with your account number, payment amount, and frequency. Set a maximum debit limit for better financial control.
- Submit and verify: Submit the form for bank verification. You may need to confirm the mandate via OTP or another security step.
- Monitor activation: Once activated, check your account for the first few transactions to ensure everything is functioning as expected.
- Adjust as needed: Modify or cancel the OTM if your payment needs to change, ensuring it remains aligned with your financial goals.
Also Read: How to invest in Mutual Funds in 7 easy ways
Conclusion
A one-time mandate (OTM) offers an efficient way to manage your recurring payments by automating the process. With OTM in place, you can rest assured that your payments will be made on time, reducing the hassle of tracking multiple due dates and improving your overall financial management.
FAQs
Can I cancel a one-time mandate after it has been set up?
Yes, you can cancel a one-time mandate (OTM) at any time by contacting Axis Bank. The cancellation process is straightforward and can often be done online or by submitting a written request to your bank.
How long does a one-time mandate remain active?
A one-time mandate (OTM) remains active until you decide to cancel it or until the end of the period specified in the mandate. If no end date is specified, it continues indefinitely until cancelled.
How can I track the status of a one-time mandate?
You can track the status of your one-time mandate (OTM) through your bank’s online banking portal or mobile app. Additionally, you can contact your bank’s customer service for updates on the mandate's status.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
