Importance of Nominee in account

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Anupama Nair


You work hard to save money in your Savings account, fixed deposit or recurring deposit to meet the current and future needs of your loved ones. But have you ever thought about what would happen if you are not around and your loved ones are unable to access the funds?

While it is not a pleasant situation to think about, to ensure your family’s safety, security and stability, it is very important to have a nomination in your bank account, be it a savings account, fixed deposit or recurring deposit. If there is no nominee, there is a chance that your rightful heir(s) may be asked to produce a court order or a succession certificate to claim the money. The nomination facility ensures that your funds are easily transferred to your loved ones in your absence.


What is nomination? “A nomination in banking terms refers to an account holder’s right to appoint one or more persons who are entitled to receive the money in case of the death of the account holder”. If there is a nominee the bank will transfer the funds to the nominee’s account without insisting on a court order, succession certificate or letter of administration. Sounds easy, but in reality it is not. You need to follow certain rules to ensure there is no hassle for your nominee:


  • Make sure you submit a nominee’s name when you open a new savings or fixed deposit account in a bank. In fact, today, most banks insist on a nominee at the time of opening the account.
  • A nomination facility is only available for accounts opened in an individual capacity (single or joint accounts or sole proprietorship accounts). They are not available for a representative account.
  • A new nomination can be added by the account holder during their lifetime. If the account holder has not made any nomination yet or has cancelled a nomination, he/she can simply add another nomination by filling up form DA1. The account holder’s details, account details and the nominee’s information have to be filled up in this form. This form requires details of all account holders.
  • A nomination can be cancelled or deleted by the account owner anytime during their life. The account holder must fill up form DA2 in order to cancel the nomination. This form will require details of the account holder/s, the account, and the name and address of the nominee who is going to be cancelled. This form must be signed by all the account holders and to change the nominee DA3 form can be filled.
  •  A minor can be a nominee, however, all the details of the legal guardian who must be an adult have to be mentioned in the nomination form. The legal guardian of the nominee will receive the amount on the minor’s behalf until the minor reaches the age of maturity.
  • One account can only have one nominee.
  • A nominee can only receive the funds from an account on death of the account holder and the death of all account holders in case of joint accounts.


In most cases, a nominee is a legal heir of the account holder. However, it might not be the same in all cases. A nominee is a ‘trustee’ of the funds of the account holder. He/she is a custodian of the funds until the legal heir can legally claim them. Cancellation or variation in the nomination can be made at any time as long as the account is in force. However, while making nomination, cancellation or variation, the applicable rules need to be followed.


If all the applicable rules are followed, nomination is easy.

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