When you do not have a nominee appointed in your bank account, what happens to your money when you pass away?
What are the benefits of having bank account with nominee facility? Why your bank insist you to appoint one?

What Do You Understand By Nomination In Bank Account?
As per RBI Guidelines, nomination is defined under Section 45ZA and 45ZF of the Banking Regulation Act, 1949. It enable banks to dispose of deceased assets without complication. It means banks can directly pay the balance of deceased account to nominee with few mandatory document.
A nomination in bank account can be changed whenever required. Multiple persons can be opted for it. You have the option to let the nominee know about him/her being nominated of your asset. The name of the nominee can be printed on FD advices, account passbook etc.
Having a nominee listed in your bank account is an important step to take as it can help you protect your loved ones’ financial interests in the event of your passing.
A number of good things come along when have appointed a nominee. Also, it reduces the hardship your dear ones would face when you are gone. Besides, it gives you a sense of relief.
Without one, important decisions about how and when your funds are accessed could be left in limbo – with potentially serious consequences. Find out the ramifications and steps to take!
Benefits of having appointed a nominee in your bank account are as under-
1 | When you have nominee appointed in your account, settlement of your assets can be done quite easily. |
2 | Bank usually ask for lesser documents for processing and settlement of deceased account. |
3 | No need for notorized documents. Death claim through legal representation usually requires documents and papers such as letter of disclaimer, indemnity bond, affidavit which need to be stamped and notorized. |
4 | When you have nominated someone for your asset disposal, claim settlement when you pass away happens in a much shorter route. |
5 | The main objective being it makes deceased claim settlement without much hurdle. Because of that your near and dear ones’ does not face the financial strains. |
Learn what happens if you do not add a nominee to your bank account and how to rectify the issue.
Determine Your Bank Account Type.
Bank account comes in various forms, it can be just a single operated savings Bank account or it can a jointly operated savings Bank account. Other than that, you may also find certain bank accounts which are specific in its purpose.
Like for example a business current account, which is meant for business transaction only. Why we need to determine the bank account is that, you might be able to know if nomination facility is available or not.
It’s for sure that single operated any kinds of bank account have nomination facility. The problem starts when you have a joint account where account opration mandate Is “Either Or Survivor”. This mandate enable the users to operate bank account by anyone of the account operators. Such type of account does not have nomination facility.
When nomination is not listed in an account. Post settlement of account when you pass away would be by legal representation where the claimant will be appointed by the law. Court issue related documents such as next to kin certificate and legal succession certificate to enable the claimant to settle the deceased assets.
Review Any Existing Nomination Documents or Instructions.
If you have a doubt about whether you have done nomination of account or not, you can check it out pretty easily. There are few ways to confirm that.
Visiting your bank is one of easiest way, as you can directly enquire to the concern counter to verify whether you have appointed nominee when opening a bank account or not. Another way of doing it is by using bank’s internet banking.
When you access your account online through net-banking, you might be able to know the details of nomination. Normally it is found under account setting option. Just a few clicks here and there would give you the exact idea on it.
If you are unsure if you have a named nominee in place, double-check your documents and look at the instructions associated with your bank account. Your will or trust can also provide clues as to whether or not you have nominated someone to take over the account after your death.
In some cases, the document may list who should become the account’s successor; in others, your executor or administrator (depending on how the will is structured) may be responsible for processing what happens to funds in accounts without direct beneficiaries.
Enquire About Jointly Operated Accounts.
If you are unsure of the nomination structure in your bank account, it is important to enquire with financial institutions on the status of the account.
Bank account with the survivorship clause comes in many. To name few, you have
- Either or Survivor
- Former or Survivor
- Later or Survivor
- Jointly Operated Account
- Power of Attorney.
The first one- Either or Survivor need not have a nominee as either death of one operator may transfer the ownership of the asset to the surviving operator. The second one- Former or Survivor goes like this. In this clause, operators mandate the bank whom to be former and later account operator.
On the death of former, the survivor will get the benefit of the asset if no nomination/will was made. If nomination/will was made or the former had an legal heir, the asset settlement will be as per entitlement which the judgement court will decide. The vice-versa is true for the third one-Later or Survivor.
However, financial institutions are legally obligated to investigate and may choose not to transfer assets until all parties involved can be authenticated.
Understand Rules Of Nomination Facility.
It is important to note that the process and rules surrounding nomination facility in bank accounts may vary between countries and different banks. Overall, it will be same as it would be under the regulation of various acts such as NI Act 1881, the Indian Contract Act etc.
Other countries have their own regulatory authorities. The base line would be similar but with slight deviation in operation module. Understanding the regulations in your location is essential if you wish to nominate a person or people on your bank account.
Additionally, you must ensure the nominated individuals have been properly registered with your banking institution for the transfer to be made in accordance with the legal requisites for designated beneficiaries.
When nominee has an active bank account with the same bank, it becomes quite hassle-free in executing any sort of transactions related to deceased claims. Keeping up-to-date on regulations will ensure smooth management of funds should an individual pass away without having made designations.
Investigate Estate Administration Laws and Regulations.
If you do not have a nominated beneficiary on record with your chosen banking institution, it is important to investigate the estate administration laws and regulations in your area.
This involves looking into the rights of surviving family members or other individuals who are likely associated with the deceased individual. For example, some financial documents and bank accounts may be able to be managed by their next-of-kin in accordance with local rules and regulations.
Also, consider consulting a qualified legal professional to ensure that all of the proper documents are included when administering the deceased’s estate.