In this era, where investment of time and relevant skills proves to be a boon for today’s changing lives. So, as it is becoming essential to make investment related to your finances, making it a wise decision, for eventually receiving higher returns with minimal risks in the future. To match up with today’s on going life and proper placement of finances, people are often more seen at banks, insurance companies or even to every second financial advisor to help them out and giving up to date suggestions about how to invest their money to get favourable returns and other benefits.

Like wise, in banks and other insurance companies, there is been a vast spread on information about a process known as nomination. Although, some of us, we don’t agree to keeping a nominee or to sign a nomination form. But, if you’re buying a car taking car insurance, securing life by taking a life insurance, the same way, it is important to assigning a nominee is a sure solution, as for some day, you would also need financial security as well to ensure that your finances would be handled even after an event of death or sudden demise.

A nominee is basically a person responsible for holding money on behalf of an account depositor or a legal heir in case of safe locker account to hold on to the assets of the deceased person. But there are certain rights and the following exceptions to that rights for the designated nominee. Although we all are well known, what is nomination and its duly procedures, but in some of the cases, there could become a minor confusion as to the question that, “Is nominee the sole holder of assets/money or merely a trustee in the name of a beneficial person?” Definitely, there can be a situation, where nominees have been assigned the power as the trustees on the behalf of other people such as a minor, afterwards by signing the desired form, the money or the property can be therefore transferred.

But another side should also be considered that it totally depends upon the depositor, account holder or safe locker holder to decide whether they want to keep a nominee or not. As, it comes under a general duty of banks and other insurance company’s officials to further advise and tell about the very advantages of making or considering nomination. Still the deposit account holder doesn’t want to then, the official or the responsible person, can have the account holder’s signature on the desired form and can further carry towards the related procedure and formalities.

The general procedure of nomination is essential just because, there can be a final guardian of money/property in cause of any major event taking place.

But while considering the desired nomination for our near and trusted ones, often we forget some important guidelines to make someone nominee because at the time of signing and naming the nominee, authority, time variance and proper allocation of money should also be critically considered. 

Some of the essential things are like :

1. The overall basic reminder becomes the limited authority with nominee :

As I have mentioned above, nominee is an actual trustee of money or the caretaker carrying the right as nominee to desired money but cannot claim for the money and as regards to any will made, the legal heir gets all the property, unless the nominee has been assigned.

2. Guideline for nomination as per any insurance policy :

In case of an insurance policy, the policy holder can also give more than two to three names for nomination, first looking at family’s convenience, as including other prior names, a document proof is also needed, otherwise it could become a bit difficult to acquire money at later stage.

3. Straight nomination gets qualified as per your demat holdings or share accounts :

In case of a share account, the nominee gets the money facing lesser obligations and if money is being invested via mutual funds, then it gives you a right to nominate two to three persons also providing them with the right to claim for the money.

4. Another intelligent source through Public Funds or Public Provident Funds(PPF) :

One of the better and convenient way to invest money and in a more risk free form, secure setting is a PPF account, as it can be initially started with less amount of deposit of money. In case any name is not given for nominee, and also the amount is less than one lakh, then easily it could be given to its legal heir, but if the amount is more, the nominee identification certificate is to be given to verify the same.

5. There is no immediate urgency to give names for nominations before opening any investment account :

A nominee can also be later added filling the desired da-1 form, in case of stated nomination again has to be changed, it can be done through filling up da -2 form. If the nomination hasn’t been done, then the desired money is been transferred to real relatives of account holder.

So here are some essentials regarding the different circumstances and situations important to be considered for nomination. Be accountable enough to choose anyone to be a nominee and take the most appropriate decision.


  • Shaima Khan

    Founder Of Artizone Information, who has interest in content creation and managing web analytics

    Artizone Information

    Shaima Khan is an MBA aspirant, a Content Creator and Writer, who is by nature a curious knowledge seeker, an avid reader, who writes simply for her inner joy and is more keen towards gathering every interesting part of knowledge. And because of her ever increasing craze for research technology, marketing, career and social development led her to be - Founder of "Artizone" (Information makes life simple)