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Have You Nominated Someone On Your Accounts?
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This is actually a tiny detail that so many of us forget when we do our financial documentation but very vital when it comes to succession issues.
I know that I am very lazy I rarely do it.
Specifying a nominee in your bank account, fixed deposit account and your demat account (among others) makes it easier for your successor to claim the money or securities in your accounts.
What is a Nomination?
When you are filling up an account opening form, the bank usually asks you to write down the name of a nominee – any individual who will receive the proceeds of the account in case of your death (and other joint holders). A nomination in such a case, ensure that your successor will be able to avail the amount in your account with a minimum of documentation and hassle.
What does a Nominee do?
In the case of any account with a bank, the nominee (the person or persons designated in the account) will have the right to get the amount held in the deposit even though he or she is not the owner of that amount. The bank or financial institution will distribute the proceeds to the nominee in accordance with the laws of succession.
There is a slight difference in the case of a Demat Account: Here the Nominee becomes the owner of the securities lying in the Demat Account of the original holder or holders. The proceeds (that is, the securities are transferred to the demat account of the nominee in line with the process laid down.
What is the process to appoint a Nominee to an account?
It is quite simple and does not require any big procedure. All you need to do is fill and submit the Nomination form available at any branch of the bank or institution.
Can there be more than one Nominee for an account?
It differs from account to account. Certain accounts like savings, demat and fixed deposits can have only one nominee; however, accounts like PPF and mutual funds can have more than one nominee.
What is the role of a Nominee in case of a Joint Deposit Account?
The Nominee’s role comes into play only after the demise of all the account holders.
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