Safe Harbour. Nitty-gritty of nomination

What happens to your bank deposits, the balance in your savings accounts and lockers once you pass away? Can the intended beneficiaries get easy access to them? Yes, if you make use of the nomination facility.

You can have only one person as a nominee, except in the case of a jointly operated locker account, where you can nominate up to two people. You can even make a nomination in favour of a minor. But should anything happen before they attain majority, the natural guardian or a third person appointed by you would receive the amount/contents.

While it always helps to make a nomination right away when you are opening a deposit account or a locker, you can even do so at a later date. You are also free to cancel or change a nominee anytime during your lifetime. Forms for these purposes are available at your bank. You must ensure that you get an acknowledgement from the bank once you submit the form.

So, what are a nominee’s entitlements once the original deposit or locker holder passes away? In case of a single deposit account (savings or term deposits), the nominee is entitled to receive payment after the individual’s death; in case of a jointly held account (savings or term deposits), the right of the nominee arises only after the death of all the depositors.

But if only one of the depositors passes away, then in case of a jointly operated account, the legal heir along with the remaining surviving depositors is entitled to the amount. In the case of joint accounts other than those that are to be jointly operated, the surviving depositors alone are entitled. As regards a term deposit, it can be held until maturity even if a depositor passes away, but premature withdrawal is also allowed by the nominee or survivor along with legal heirs. Penal charge is waived off.

When it comes to a locker hired by a single person, the nominee will have access to it only after the individual dies. In the case it is held jointly, they can only access it when all locker holders die. But if only one of the joint hirers passes way, then the nominee of that hirer along with the surviving hirer will get access to the locker.

In a situation where the nominee and the legal heir is the same (say the deceased person’s wife), then getting access to the deceased person’s deposit/locker is pretty straight forward. But suppose the person is survived not just by his wife (who is the nominee), but also his children (who too are legal heirs). In such a scenario, if the children so choose, they too can stake claim to the deposit/locker. So while the bank will make the transfer to the nominee, the legal heirs can file a claim against the nominee.

Moreover, if both the nominee and the legal heir make simultaneous claims, the bank will take note of the succession certificate held by the legal heir. If the latter brings an order/certificate from a court or a competent authority restraining the bank from making payment to the nominee, the bank will abide by that.