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Important rules regarding nomination

TC / By CS SURBHI SAXENA / June 28, 2021 June 28, 2021
Every time you fill up a form for an investment, whether it’s a Fixed Deposit or Insurance, Shares or a Mutual Fund or even if you’re opening a new bank account, there will be a separate section that will ask you to mention a ‘Nominee’. This column is often left blank by a lot of people who are investing or opening an account, but it shouldn’t be, and here’s why.

1. Is Nomination required where deposits are held in representative capacity?

Answer:- No nomination is required in accounts where deposits are held in a representative capacity.

2. Nomination in case of Joint account?

Answer:- In case of joint accounts of individuals, nomination should be made by all depositors jointly.

3. Can a non- resident be nominated as a nominee in a resident account?

Answer:- Yes, a non resident can be nominated as a nominee in a resident account. In case of a non-resident nominee, the amount entitled to him from the account(s)/ deposit(s) of a deceased person, will be credited to his NRO account.

4. Can minors make nominations in self operated accounts?

Answer:- Minors cannot make a nomination in self operated minor accounts. The Guardian can make nominations on behalf of the minor.

5. Do nominations require renewal in term deposits?

Answer:- A nomination will continue to be in force even on renewal of term deposits, unless specifically cancelled or changed.

6. Is nomination compulsory?

Answer:- Nomination is compulsory in all single named accounts, where the account holder is not willing to nominate, he/she is to give his/her refusal in writing.

7. How many nominees are required in different types of accounts?

Answer:-  There are different kinds of accounts like deposit account, safe custody account, safe deposit account, single account, joint account, etc. Here is the table below to give you clear understanding of number of nominee require in which kind of accounts:

 

TYPES OF ACCOUNTS

 

NATURE OF ACCOUNTS

NO. OF NOMINEES

Deposits

Single/Joint

Only One

Safe Custody

Single only 

Only One

Safe Deposit Locker

Single Only

Only One

Safe Deposit Locker

Joint- Either Survivor mandate

Only One

Safe Deposit Locker

Joint- Former Survivor mandate

Only One

Safe Deposit Locker

Joint- Joint Operations

Each one can nominate one ( Max. 2 as per IBA)

 

Read more at: Announcements By Finance Minister: Economic Package for Travel Sector and Tourism

CS SURBHI SAXENA

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