When you open a bank account, FD, RD, PPF, or locker, one important detail that many people ignore is Nomination. Recently, the Nomination Rule in Bank Accounts has been updated, and now it is compulsory to either add a nominee or submit a declaration that you do not want one. This rule helps protect your family and makes claim settlement easier in case something happens to you. Let’s understand this in simple language.
What is Nomination in a Bank Account?
Nomination means selecting a person (called the nominee) who will receive the money from your bank account after your death. The nominee can be your spouse, parents, children, or any person you trust. The nominee does not get control of your account while you are alive. They can only claim the money after your death.
Why is Nomination Important?
If a person dies without a nominee, their family will have to go through legal procedures, affidavits, and sometimes court documents to claim the money. This can take weeks or months. But if a nominee is already registered, the bank only needs the death certificate and nominee’s ID proof, and the settlement becomes fast and easy. So, nomination helps your family avoid delays and stress during a difficult time.
New Nomination Rule in Bank Accounts (Latest Update)
For New Accounts
When opening a new savings account, current account, FD, RD, or locker, the customer must:
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Add a nominee, or
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Submit a written declaration saying they do not want a nominee.
Without this, the account will not be opened.
For Existing Accounts
If an existing account does not have a nominee, the bank will request the account holder to submit:
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Nomination Form DA-1, or
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A Declaration Form if they do not want to nominate anyone.
Banks may remind customers through SMS, email, or notice boards.
Who Can Be a Nominee?
You can choose anyone as a nominee, but most people nominate close family members like spouse, children, or parents. If your nominee is a minor, you must also provide the guardian’s name who will handle the money until the minor turns 18.
How to Add or Change a Nominee
To add or change a nominee:
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Visit your bank branch.
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Fill Form DA-1 (for adding) or Form DA-3 (for changing).
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Submit the form with your signature.
Many banks also allow nomination through internet banking or mobile apps.
What Happens If There Is No Nominee?
If there is no nominee, the bank cannot release the money easily. The family must submit legal heir certificates, affidavits, and sometimes even get court orders. This leads to delays and stress. Therefore, adding a nominee today is a simple step that protects your loved ones.
Example
Mr. Arjun had a savings account but did not add a nominee. After his death, his wife and children had to submit legal certificates and visit government offices. The process took months. If he had added his wife as nominee, the claim would have been settled quickly and peacefully.
Key Points to Remember
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Nominee does not own the money while you are alive.
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You can change your nominee anytime.
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Nomination makes claim settlement quick and easy.
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Nomination Rule in Bank Accounts is now mandatory for all customers.
Frequently Asked Questions
1. Is nomination compulsory now?
Yes, nomination is compulsory. If you do not want a nominee, you must give a written declaration.
2. Can I change a nominee later?
Yes, you can change your nominee anytime using Form DA-3.
3. Does the nominee become the legal owner?
A nominee is only the receiver of funds. Legal heirs still have rights under inheritance laws.
4. Can I add a nominee online?
Yes, many banks allow nomination through net banking or mobile apps.
Conclusion
The Nomination Rule in Bank Accounts is a very important step to safeguard your family’s financial future. It ensures that your money is handed over easily and quickly to the right person. If your account does not have a nominee, update it today. It takes only a few minutes but can save your loved ones from major difficulties later.
