Explained: What is one-time mandate (OTM) in mutual funds

economictimes.indiatimes.com:

A One-Time Mandate (OTM) is a directive given by an investor to a mutual fund house to invest a specific lumpsum amount in a particular mutual fund scheme. Unlike systematic investment plans (SIPs), which involve regular, periodic investments, an OTM involves a single, one-off investment. This approach allows investors to deploy their funds immediately based on their financial goals, market outlook, or specific investment opportunities.

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How does OTM work?

1. Initiation: The investor decides to invest a lump sum amount in a mutual fund. This could be from savings, bonuses, inheritance, or any other source of funds.
   
2. Selection: The investor selects a mutual fund scheme that aligns with their investment objectives, risk tolerance, and time horizon.
   
3. Mandate Submission: The investor provides a one-time instruction to the mutual fund house, either through an online platform or by submitting a physical mandate form, specifying the amount to be invested.
   
4. Investment Execution: Upon receiving the mandate, the mutual fund house invests the specified amount in the chosen scheme at the prevailing Net Asset Value (NAV).
   
5. Completion: The transaction is executed once, and no further investments are made unless the investor initiates additional mandates.
   

Benefits of One-Time Mandate

1. Simplicity and convenience: OTM is a straightforward method,