Everything you should know about the nomination in investments..

Nominee and Nominations-
Basically, what does a nominee mean? In simple words nominee, it’s someone who is designated for a certain kind of job. In finance, a nominee is the one who is liable to claim the benefits in various investments of a deceased person. We often hear that the property of someone dead is transferred to the person who is claimed as a nominee by the owner. Anyone you consider as your first relative maybe your spouse or your parents or your children is added as nominees. Nomination is a service that allows the deposit holder or the investment owner to name the property that can be climbed after his/ her death.
Nomination in the bank account

Bank Nominations –

If you have a Savings account or a Fixed Deposit or some deposit locker or you are availing the safe custody facilities you can make nominations. But you can only nominate a person in your personal capacity . Also, the nomination can be done in the case of one person only. Also, the nominee can be a non-resident Indian. Bank can also record the name of the nominee in the passbook if you ask for it otherwise the Bank will merely mention that ‘Nomination has been Registered’. This can be done in the case of FD receipts also. Another aspect is that if you have many FD receipts you can have different nominees for them but not more than one nominee per FD. You have to register for nomination either at the time of opening or you can do it later also you can cancel or change a nominee at any time.

Mutual funds Nominations –

If you have invested in any mutual funds – that investor called a unitholder, can nominate up to three persons in a single folio and indicate the percentage of allocation for each of them. The nominee details like name, address, relationship, and the percentage of allocation,n, etc. have to be filled up by you in the relevant section of the Common Application Form (CAF) at the time of investing. Demat account investors should not bother about this part as the nominee mentioned in the Demat account will be the nominee for all your investments. Adding or modifying existing nominees can also be done online or by visiting the nearest investor center of the AMC.

Nomination in life insurance policies –

According to the Insurance Laws (Amendments) Act, 2015, if any immediate family member such as parents, spouse, or children has been made nominee, then they will be called beneficiary nominees. A policyholder can nominate his entire family or even others who are not related to him. The nominee in a life insurance policy gets the sum assured and not the total of premiums paid, unlike other investments. A nomination becomes critical as the benefits can compensate for the financial loss at least and life goes on for the dependents of the deceased. The insurance company is liable to pay the sum assured only to the beneficiary nominee(s) and not to other legal heirs.

Nomination in Demat accounts –

The Demat account holders hold many equity shares & different securities like bonds & debentures, the nominee will be the nominee for all of them & the procedure for transfer (called transmission) of securities from the Demat account of the deceased to the Demat account of the nominee becomes easy. You can nominate up to three individuals in your Demat account.

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