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What if you don’t give a nominee for your bank account?


When applying for a bank account and filling out forms, you will always be asked to “mention a nominee.” Is it really necessary to have a nominee for any bank account? What happens to any account holder’s assets if he or she dies unexpectedly?

Nomination for bank accountIn banking terms, nomination means that the account holder must name someone to claim the deposit or investment after the original owner of the account dies. So, a nominee will be the person named by the account holder in the nomination section for the asset or account in question. The nominee is a beneficiary or receiver of assets, funds, and investments in a financial system, such as a bank, insurance, or property.

What if there is no nominee for an account?If an account holder does not specify a ‘nominee,’ the legal heirs (one who is the successor and whose name is mentioned in the will of the deceased person) may have to go through a lengthy and complicated process to claim the funds in the account or any asset related to the account after the account holder’s death.

Who all can be nominees?A nominee or nominees in a bank account is a person or persons in whom the account holder has faith. It could be a member of the individual’s family, such as a child, spouse, or relative, among others. There can be different nominees to different bank accounts with the same names. One can also have separate nominees for different accounts like, Fixed Deposit (FD), savings and Recurring Deposit (RD) accounts, held with the same bank. A minor can also be the nominee of an account, but the minor must be designated by a guardian, and the funds must be given to the guardian by the bank.

Some general terms and conditions that apply to nominee:-There is usually only ‘one nominee’ for a singly held bank account.

-A person may also nominate an NRI, but the sum will be repatriated only with the permission of the Reserve Bank of India (RBI)

-A person who has been legally authorised to operate a minor’s account may also file the nomination on the minor’s behalf.

-Any applicant must make a nomination with the form of the Banking Banking Companies (Nomination) Rules 1985.

-Details of the nominee can also be changed during the subsistence of the account relationship by filling the same form as mentioned above.

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