Understanding e-Mandates: Streamlining Fixed Income Investments at Tap Invest
Tap Invest offers a diverse platform for fixed-income investments, including bonds. To ensure a smooth and hassle-free experience, we leverage e-Mandates, a convenient digital authorization system. This article delves into e-mandates, explaining their meaning, their role in recurring payments like fixed-income investments, and how to handle potential rejections.
What is an e-mandate?
An e-mandate, short for electronic mandate, is a digital authorisation given by you, the investor, to your bank. It allows a pre-defined amount to be automatically deducted from your account at specific intervals. This simplifies recurring payments, making it ideal for fixed-income investments like bonds with regular interest payouts or systematic investment plans (SIPs).
Benefits of e-Mandates:
- Convenience: Eliminates the need for manual payments, saving time and effort.
- Timely Payments: Ensures on-time payments for your investments, avoiding late fees or penalties.
- Peace of Mind: Knowing your investments are funded automatically provides peace of mind.
How e-Mandates Work
Setting up an e-mandate is a straightforward process:
- Initiation: You initiate the process on the Tap Invest platform while setting up your investment.
- Authorisation: You provide your bank details and confirm the amount and frequency of deductions.
- Authentication: Your bank verifies your identity through online banking credentials or a one-time password (OTP).
- Registration: The e-Mandate details are submitted to the National Payments Corporation of India (NPCI) for validation.
- Activation: Once approved, the e-Mandate is activated with your bank, allowing automatic deductions for your investments.
e-Mandate vs. NACH e-Mandate – Understanding the Difference
NACH (National Automated Clearing House) is a payment system that facilitates bulk electronic transactions between banks in India. NACH e-Mandates are a specific type of e-Mandate that leverages the NACH system.
Here’s a breakdown of the key differences:
| Feature | e-Mandate | NACH e-Mandate |
| Focus | General term for electronic authorisation for recurring payments | The specific type of e-mandate utilising the NACH system |
| Transaction Volume | It can be individual or bulk | Primarily for bulk transactions |
| Use Case | Wide range of recurring payments | Often used for high-volume transactions like salaries or government payments |
For investment purposes on Tap Invest, you’ll likely encounter standard e-mandates for individual recurring payments associated with your investments.
e-Mandate Rejected by Bank – Understanding the Reasons
While e-mandates are convenient, there might be situations where your bank rejects the mandate. Here are some common reasons:
- Insufficient Funds: Ensure your bank account has sufficient funds to cover the first deduction amount.
- Incorrect Information: Double-check all provided details like account number, IFSC code, and investment amount for discrepancies.
- Inactive Bank Account: Verify if your bank account is active and operational.
- Bank-Specific Limits: Some banks limit the amount or frequency of e-Mandate transactions. Contact your bank to confirm these.
- Technical Issues: Occasionally, technical glitches at your bank might cause a rejection. Try initiating the e-mandate again later or contact your bank for assistance.
Managing Rejected e-Mandates:
If your e-mandate is rejected, fret not. Here’s how to proceed:
- Review Reasons: Check the platform notification or contact Tap Invest to support the rejection reason.
- Address the Issue: Depending on the reason, you might need to revise account details, ensure sufficient funds, or contact your bank for assistance.
- Re-initiate e-Mandate: Once the issue is resolved, re-initiate the e-Mandate process through Tapinvest.in.
Conclusion:
E mandates make managing recurring payments seamless and secure. Whether through NACH or e-NACH systems, these automated processes simplify financial transactions, reducing errors and manual intervention.
FAQs On e-mandate:
What is an e-mandate?
An e-mandate is an electronic authorisation to automatically debit recurring payments from a customer’s account.
What happens if my e-mandate is rejected?
>> An e-mandate can be rejected due to insufficient funds, incorrect details, or failed authentication.
What is a NACH e mandate?
>> NACH e mandate is an automated clearing system that facilitates recurring payments like loan EMIs and investments.
Is the mandate safe?
>> Yes, e-mandates are secured through OTPs and net banking, complying with RBI guidelines.
Is an e-mandate mandatory for investing in Tap Invest?
>> While not mandatory for all investments, e-mandates are highly recommended for fixed-income investments like bonds with recurring interest payouts or SIPs. They ensure timely payments and a seamless investment experience.
