4 MinsFebruary 05, 2020
You diligently save money in your Savings account, fixed deposit or recurring deposit to meet your 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 for a Bank Account?
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 simply transfer the funds
to the nominee/s account without insisting on a court order, succession certificate or letter of administration.
Here are a few points to keep in mind when it comes to nomination:
1. 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.
2. 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.
3. 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.
4. 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. To change the nominee DA3 form can be utilized.
5. A minor can be a nominee. In this case, all the details of the legal guardian (who must be an adult) of the minor 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.
6. One account can only have one nominee.
7. 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.
8. 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.
Axis Bank savings accounts are designed to meet the banking needs of people from all walks of life. Each Savings Account offers unique features such as a high transaction limit, free cheque books,
etc. The offers and discounts range from discounted movie tickets, EDGE REWARDS to emergency travel allowances and a lot more.
Disclaimer: This article has been authored by The Source, a Mumbai-based content creation and curation firm. Axis Bank does not influence views of the author in any way. Axis Bank and The Source shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.