Do you know?
As per the Government’s latest data (Feb 2023), there are nearly 10.25 crore people whose unclaimed deposits worth Rs.35,012 crore are still lying with the banks and have now been transferred to the RBI.
Out of the Rs.35,012 crores SBI has the largest share of Rs 8,086 crore, followed by PNB at Rs 5,340 crore, Canara Bank at Rs 4,558 crore and Bank of Baroda at Rs 3,904 crore.
As per AMFI’s May 2023 data, around Rs 2,638 crore of unclaimed dividends and units are lying with mutual fund (MF) houses, Rs 1,659 crore in the form of unclaimed dividends and the rest , Rs 978.92 crore, are unclaimed redemptions.
Why is nomination important?
- If you die all your investments can be transferred to your nominee. If there is no nominee, your legal heirs will have to go through a long and tedious process for the same.
How would it help the family of the account holder if one appoints a nominee?
At Zerodha, Upon the death of the account holder, if a nominee is in place it becomes easy for the nominee to receive such shares from the Depository Participant (Zerodha here). All that is needed is a demat account in the nominee’s name.
Without a nominee, the DP will ask for additional documents including one of these - Succession Certificate, Probate of the Will. A detailed explanation is available in this support article.
Some FAQs about Nominees:
Who is a Nominee?
- The nominee is the trustee you appoint to ensure your assets are passed on to your heirs. The nominee collects the assets from the bank or some other financial entity and then ensures that it is correctly appropriated to your heirs based on your instructions.
Note: Technically and legally, the nominee is only a custodian of assets and not the ultimate beneficiary.
Who is a legal heir?
- According to the Succession Act, a legal heir is a person who is selected by law to receive the wealth of the deceased in the absence of a will.
Why the need of a Nominee if one can directly appoint the legal heir as Nominee?
- Things get simple for all the parties concerned if one appoints their legal heir as Nominee. But, in many cases, things are not as simple as they seem. Let me illustrate this with an example:
Person A’s family consists of old parents and Person B’s family, let’s say a minor child, They are most likely to find it difficult to get the money. It would help to have a different nominee who can make sure money reaches the right person after the death of the nominator.
What steps should one take to make sure their money is passed on to the right person after one’s death?
1. Creating your own Will
Will is basically a written document that states the desire of the deceased person regarding distribution of his estate.
2. Appointing Nominee(s)
As one would be dealing with multiple financial entities, Having a nominee appointed with each one of them ensures that the money can be easily accessible to the family. In case of the demise of the nominator. Nomination is merely a means to an end.
In the absence of nomination, the process can become lengthy and complicated,
You can very easily appoint a nominee online at Zerodha
You can check the steps here in our support article:
Is it Not Possible Online?