When a fixed deposit (FD) holder dies without naming a nominee, families often assume the money is stuck or lost in legal complexity. Indian banking rules allow legal heirs to claim such deposits, provided they submit the right documents and follow the due process.
Understanding this distinction is crucial, especially as a large number of deposits remain unclaimed each year due to a lack of awareness.
Who is a nominee?
A nominee in a bank account or fixed deposit is essentially a custodian appointed by the depositor to receive the funds upon the account holder's death. If no nominee has been registered for the FD, the bank will ask the claimant to provide two documents: proof of the depositor's death and proof of their legal right to inherit the funds.
The first requirement is met by submitting the depositor's official death certificate. The second depends on whether the depositor left behind a will.
Does a nominee become the owner of FD?
The nominee does not automatically become the owner of the funds. “A nominee is only authorised to receive the fixed deposit proceeds from the bank for settlement purposes. Legal ownership remains with the rightful heirs as per succession laws, and the nominee is required to pass on the money to them. Nomination helps banks release funds smoothly but does not override inheritance rights,” BankBazaar CEO Adhil Shetty said.
How can one claim FD without a will?
Under intestate succession (death without a will), children and spouse of the deceased are the primary heirs in most cases. The bank demands particulars of the depositor's death and proof of legitimate heirship, which will evidence who steps in to inherit the account following the death of the account-holder where no nominee is declared.
“As per the requirements laid down by the bank and the amount of the FD involved, the claimant must obtain a succession certificate from a civil court or a legal heir certificate from the local revenue authority. The said documents help in recognising the legitimate heir or heirs who are entitled to inherit the expressed amount according to established personal law,”
According to experts, common triggers include missing nominations, KYC mismatches and disputes among children. Keeping nominations updated, records consistent and making a will significantly reduces claim friction.
This article has already been published: https://www.moneycontrol.com/news/business/personal-finance/can-a-legal-heir-claim-an-fd-without-being-named-as-a-nominee-here-s-a-guide-13821906.html
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