How to Add Nominee in your Bank Account?
Nomination is the process of designating an individual by the account holder to receive funds in an account in case of unfortunate event of the account holder's death. It ensures that one's hard-earned money is passed on to their loved ones smoothly, without legal complications. Many are unaware of the nomination process or assume it to be a complex task. However, adding, changing, or removing a nominee from the bank account is quite simple.
Understanding Nomination in Banking
Nomination is not the same as a will or inheritance. Nomination is solely for the purpose of simplifying the process of claiming the funds of deceased account holders and avoids delays or legal complications. Nomination facility does not take away the rights of legal heirs on the estate of the deceased. The nominee does not automatically derive any ownership rights over the account funds. The nominee would be receiving the amount / articles from the Bank as a trustee of the legal heirs and will be responsible for distributing the funds to the legal heirs of the deceased account holder as per the applicable laws.
Who Can Be Nominated?
Nomination facility is intended only for individuals including a sole proprietary concern. They can nominate any other individua. including immediate family members such as spouse, children, parents, siblings, etc. or any other trusted person as nominee to the bank account. If the nominee is a minor, the depositor shall appoint another individual, not being a minor, to receive the amount of deposit on behalf of the nominee in the event of death of the depositor(s) during the minority of the nominee. In the case of a joint deposit account, the nominee's right to receive money accrues only after the death of all the depositors.
Is Nomination Mandatory?
While nomination is not compulsory, the Bank strongly recommends appointing a nominee for all deposit accounts, including Savings Accounts, Fixed Deposits, and Recurring Deposits. It helps in the smooth settlement of claims and protects the interests of legal heirs.
- Nomination is applicable for deposit accounts and safe deposit locker and not for credit facilities like loans or overdrafts.
- A nomination can be made, modified, or cancelled anytime during the lifetime of the account holder.
Facility of Multiple Nomination- Successively or Simultaneously
The recent Banking Laws (Amendment) Act, 2024 has made amendments to relevant provisions of Banking Regulation Act which lays down the provisions relating to nomination. As per the amendments, multiple nomination can be made in deposit accounts whereby an account holder can nominate individuals not exceeding four, for a deposit account and will have the option to choose between two types of nomination- Simultaneous and Successive.
Simultaneous nomination allows account holders to appoint nominees to share the account proceeds in a specified ratio as per the percentage of share allocated to each nominee. However, simultaneous nomination is not allowed for safe deposit locker. In cases where nomination is successive, the proceeds pass to next nominee if the primary nominee is deceased, and this will be basis the order of priority of how a nominee is listed. These amendments are yet to be notified to come into force and the Bank will implement the multiple nomination facility once amendments are notified to come into force.
How to Add a Nominee to the Bank Deposit Account?
Adding nominee to the bank deposit account is a simple process that can be done either online through modes such as Fed Mobile/Fed Net/Fed-e-Point or by visiting the bank branch subject to the applicable rules and regulations.
By Visiting Bank Branch
a. To Add Nominee
Step 1: Visit the bank branch and request the nomination form which is also called Form DA1. The same is also available in the Banks website.
Step 2: Fill the form and have it signed by all applicants.
Step 3: Submit the duly filled nomination form at the bank branch. The bank will register the nomination and provide an acknowledgement.
b. To Change Nominee
Step 1: Visit the bank branch and procure the nomination modification form (Form DA3).
Step 2: Fill in the revised nomination details in the form, including the name, address, and other details of the new nominee.
Step 3: Submit the form at the branch. The new nomination will override the previous one.
c. To Remove Nominee
Step 1: R equest the nomination cancellation form (Form DA2) from the bank branch.
Step 2: Mention the account details and submit the form at the branch. The bank will cancel the existing nomination, and the account will be treated as one without a nominee unless a new nominee is appointed.
Register Nomination Online
Federal Bank allows customers to add or change nominees in their bank accounts from the comfort of their home. Customers can easily add a nominee to their account using the below online solution
1: FedNet: Log in to FedNet, navigate to the "Services" section, and follow the steps.
2: Fed-e-Point: Visit Fed-e-Point, navigate to “Add a nominee: log in and follow the steps.
Conclusion
Adding a nominee to the bank account is a simple yet crucial step towards securing your loved ones' financial future. By appointing a nominee, deposit account holders can ensure a smooth transmission of their deposits to their family in an unfortunate event. Always ensure to register a nominee to your accounts.
For more details on safe deposit lockers/safe customer articles, see the Bank’s Settlement of Claims Policy.