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Ask anyone the safest hack to save money and prompt comes the answer – fixed deposits (FDs)! Bank FDs are arguably the most promising and popular instruments to save money with high interest rates and minimum risks. But what happens if the FD owner dies before claiming the amount? Who gets it and what is the process?

The depositor is always asked to select a nominee who can claim the proceeds in the unfortunate event of the depositor’s death. Now, if an FD account has such details, the bank will automatically pass the money to the nominee after due verification.

Notably, the process of nomination is only to make it easier for the bank to transfer the assets without inviting any legal chaos. But if the legal heir of the deceased is different from the nominee, the latter is bound to pass on the money to the legal heir and act merely as a guardian to the assets on his name.

Rights of the nominee

• H/she acts like a trustee and shouldn’t command rights on the assets
• H/she is the primary contact person in case the FD owner die before maturity
• Nominee must be an individual. No organistaion, trust or company can substitute here.

If you did not appoint a nominee while opening your FD account, its alright. You can do it now or anytime before the maturity.

For individual accounts

• With nomination: All the power resides with the FD owner and a nominee is allowed to receive funds in case of depositor’s death before maturity.
• Without nomination: The family members of the deceased will have to go through long legal propositions and present a will and other documents to get the fund deposits.

For joint accounts

• Either or Survivor: If Mr. A & Mrs. B hold a joint account and the former dies, the funds will be given to the survivor (Mrs. B). This will be the case even if there is a nominee to the account.
• Anyone or Survivor: If there are more than two account holders, the survivors will get the final amount by the bank in case any one holder dies. If all of them die – the nominee will get the money. If there is no nominee, the legal heirs of all the depositors will get it.
• Former or Survivor: In this case, there are two account holders but only the first holder has the access to withdraw funds. If h/she dies before maturity, the second holder can get access after providing proof of former’s death. Nominee gets access if both depositors die while legal heir gets access in case of no nominee.
• Latter or survivor: Just like Former or Survivor, here the second account holder has the access to withdraw funds. If they die, the first holder can access it following the same procedure as above.

What is the process to get claim?

You need to contact the FD provider, organise and submit the relevant documents (death certificate, claim form, succession certificate, indemnity bond) for fund transfer. You can decide on continuing the FD or liquidate it before maturity.

Overall, it’ll always be more difficult to get the claim without a nominee and hence get it for all your investments.