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Bank Mandate Form for Mutual Fund Investments – Overview, Process, Benefits, Is it mandatory?

  • Akarshita Yaji
  • Jan 12 2022
  • 5 minutes
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The financial systems of the country are going through some major reforms in order to make the process of saving and investing easy and simple. Investors have time and again expressed their disapproval of the tardy process involved in making payments for Systematic Investment Plans of mutual funds. This can be resolved through the new system of issuing a “Bank Mandate Form” to automate the entire process.

What are bank mandate forms?

A bank mandate is when a third party such as the bank will be authorized to debit one’s account on predetermined dates to pay one’s SIP installments.  In other words, bank mandates are standing instructions to one’s bank regarding periodic transactions.

When are bank mandate forms necessary?

These bank mandate forms are necessary when one is investing in SIPs and requires payments to be made on specific due dates. Submission of these forms will ensure that the invested amount is auto-debited from one’s savings account as the bank will have the requisite authorisation.

What are the Benefits of a Bank Mandate Forms?

  • It facilitates SIP investment and makes it hassle free, paperless and convenient.
  • It requires one time registration.
  • The registration process is simple and can be completed easily without any external aid.
  • Safety of the transaction is assured.
  • There are lesser chances of failure of the transaction.
  • The transactions will take place according to the instructions given.

How do you submit a bank mandate form?

The bank mandate form must be submitted by the investor to the bank. It is a simple form that has to be filled, signed and submitted to the bank branch in which one has his or her savings account. The submission of this form will allow the Asset Management Company of the mutual fund to direct a fixed sum of money toward the mutual fund.

The processes involved in a Bank Mandate Form

  • One can download the bank mandate form online. 
  • Fill in the requisite details such as name, fund opted into, the SIP amount etc. and sign the form. 
  • Submit the form to the Asset Management Company of the mutual fund. The form must be submitted within 21 days of making the investment.
  • This form will be sent to the bank branch from the Asset Management Company of the mutual fund to get an express authorization from them. 
  • On getting this, the amount will be auto debited on a periodic basis.
  • The total time period taken for the authorization can range from 30 to 40 days.
  • Updates will be received via SMS and email, when the sums are debited.

How to provide Bank Mandates for investing through Finity app?

Bank mandates can be provided in 2 ways for investing in mutual funds through the Finity app

Provision of bank mandate by the online method

  • You can provide bank mandate authorisation online by going on to your account > Account Options> Bank and Mandates
  • You can then fill in all the required details like IFSC, Account Number and Account Type
  • Post that you can authorise the bank mandate through your Netbanking or through your debit card.
  • You would also need to give your PAN number here.
  • The mandate is sent to your bank and it takes all of 2 days for your e-mandate to get approved post which your SIPs can start.

Provision of bank mandate by the offline method

  • Go to your account on the Finity app
  • Download the bank mandate form
  • Fill in all the required details and sign the form
  • Scan the signed form and upload it onto the Finity app post which the same will be sent to your bank
  • Your bank will verify the details and approve the Bank Mandate form
  • The entire process can take up to 15 days for your physical bank mandate to get approved by your bank

Payment of installments

On receiving the approval from the bank, there will be an auto debit of the amount on the chosen SIP dates. However, if the approval is received prior to the SIP date (as stipulated), then the debit will happen in the succeeding month. These debits will happen on a periodic basis unless there are express instructions to stop the same. The investor will receive a debit confirmation from the bank and the AMC will display the amount received and the units allocated on their fund house’s dashboard.

Are bank mandate forms mandatory?

It is mandatory to issue bank mandates to authorise one’s bank for SIP payments to be initiated.

Frequently Asked Questions

  1. How long does it take to complete the process of a bank mandate form?
    The total time period for an authorization to come through would be between 30 to 40 days.
  1. Is the process of auto debit from one’s bank account safe and secure?
    Yes, this process is safe and secured by the bank and the receiver company. The chances of failure of the transaction are also very low.
  1. Is there any alternative to submitting a bank mandate form?
    Most banks offer the option of “Manage Biller” on their mobile applications and websites. Payments can be made through these for SIP installments on a monthly basis. The entire process of adding biller and making payments will be done in a matter of a few minutes.

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