I set up a SIP on Paytm Money and was charged a fee for the NACH mandate. My friend set one up on Groww and said it was free. Why does Paytm Money charge this fee?
This is a very common point of confusion. In reality, neither Paytm Money nor Groww charges a fee for NACH mandate registration. Setting up an auto-debit for a SIP is a free service on both platforms. The charge you have likely encountered is a penalty from your bank for a failed SIP payment (a NACH return), which is often mistaken for a registration fee.
The Standard Industry Practice: Free Mandate Registration
I was discussing this with a financial advisor, and he confirmed that it is standard practice across the industry. All major investment platforms in India, including Paytm Money, Groww, Zerodha, and others, offer NACH mandate registration completely free of charge. They do not charge their customers any fee for the service of setting up a new auto-debit instruction for a SIP.
Identifying the Source of the Charge: Your Bank Statement
My friend had this exact same confusion last month. He was convinced that Paytm Money had charged him for registering his SIP. I asked him to check his bank account statement carefully, not the investment app. When he looked at the detailed statement, the transaction description for the debit clearly said ‘NACH Return Charges’, not ‘Registration Fee’. This confirmed the charge was a penalty from his bank.
Differentiating a ‘Registration’ from a ‘Return’
The charge my friend saw was a penalty because his very first SIP installment had bounced due to insufficient funds in his account. The financial advisor explained the difference: Registration is the one-time, free setup process that links your bank to the mutual fund. A Return is a subsequent event where a scheduled payment fails, and this is what incurs a penalty from your bank. It is very common for people to mistake this penalty for a setup fee if the first installment fails.
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