Why Is It Important To Have A Nominee For A Bank Account? Read Here
Whether you open a bank account or go for any financial investment, while filling up the form for doing so, a column for nominating someone is always there.
Many times this column is left by people while opening a bank account, applying for a locker or while making investments.
However it is not advisable to do so. Read on to know why it is important to have a nominee while opening a bank account.
Who can be a nominee?
A nominee is a person who can be named while filling a form for opening a bank account or applying in an investment instrument.
A nominee can be anyone close to you or whom you trust, like either of your parents, spouse or siblings, who can receive the proceedings on your behalf after your death.
Some investments also allow you to list multiple nominees where you can even assign percentages of the money in your account. If you don't list the percentage, it will be shared equally.
Why is it important to have a nominee?
In case of an unexpected death, money lying in a bank account can be claimed by the legal heir of the dead person. While it may look simple otherwise, it is a long drawn out process, as a lot of documents like death and succession certificates and on some occasions, even a court order is required.
It becomes all the more complicated if the dead person has not nominated anybody as his or her nominee for claiming the money lying in the bank account(s).
However, if a nominee is listed in a bank account, then the process is far quicker because the bank can release the funds to the nominee with much less paperwork.
Bank lockers can also have nominees
It is important to know that it is not only accounts or deposits that can be held by the bank when someone dies unexpectedly, but also bank lockers. In case of sudden death, everything in the locker will be held by the bank until the requisite documents are produced if the locker doesn't have a nominee.
Women in India normally use bank lockers to deposit their jewellery and gold, which comes useful times of a crisis.
Therefore it is important to have a nominee for your bank locker if you live in a joint family set up or are newly married. If there is a nominee then the bank will release all the belongings to that person present in the locker, with simpler paperwork.
