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All You Need To Know About Fixed Deposit Nominee


by Mahindra Finance


February 29, 2024


5 mins read

Imagine this scenario: You diligently save your hard-earned money in a fixed deposit (FD) for years, ensuring financial security for your loved ones. But what happens if something unexpected occurs? Who will have access to your FD after your demise? This is where a fixed deposit nominee plays a crucial role.

In this comprehensive guide, we will delve into the significance of appointing a nominee for your fixed deposits. We will explore the differences between a nominee and a legal heir, discuss their roles and responsibilities, and provide practical tips on how to choose the right nominee. So let's get started.

Understanding the Role of a Nominee in Fixed Deposit

When it comes to fixed deposits, many people confuse nominees with legal heirs. Let's clarify their roles:

  • Nominee: A nominee is someone who ensures that the depositor's legal heir receives the funds from the FD after their demise. The nominee is merely a caretaker in technical terms, as they don't actually own the money.
  • Legal Heir: A legal heir is someone entitled to receive the assets and property of a deceased person according to succession laws or through a will. They are the rightful beneficiaries of the FD.

Importance of Appointing a Nominee in Fixed Deposit

You get several benefits of fixed deposit by appointing a nominee:

  • Smooth Transfer of Funds: By nominating someone, you ensure that the funds from your FD are seamlessly transferred to your legal heirs. Without a nominee, the legal heirs would have to go through a lengthy process of proving their relationship and obtaining a death certificate to access the funds.
  • Avoiding Legal Hassles: Appointing a nominee helps bypass complicated legal procedures and ensures that your loved ones receive their rightful share without any unnecessary hassle or delay.
  • Protecting Your Loved Ones: The nominee acts as a trusted custodian of your assets, ensuring that they are distributed among all the lawful heirs according to succession laws or your will. This provides financial security and peace of mind to your family in times of distress.

Choosing the right nominee

When appointing a nominee for your fixed deposit, keep these points in mind:

  • Ensure Accurate Details: It is crucial to provide precise information about the nominee, including their name, address, date of birth, and relationship with the account holder. If there are multiple nominees, specify the percentage share of each nominee. Additionally, if the nominee is a minor, include the name of an elderly family member as a guardian.
  • Keep Information Updated: Many investors forget about their nomination details after investing. It is essential to periodically review and update this information to avoid any potential conflicts or complications. Update the details if there are any changes in the spelling or name of the nominee. In case of the nominee's demise, make sure to update the nomination details across all relevant documents.
  • Choose Carefully: While you can legally appoint anyone as a nominee, it is advisable to nominate close family members or legal heirs. Having both the FD nominee and legal heir as the same person can help avoid succession rights issues. However, keep in mind that if no legitimate heir claims the assets within a reasonable time period (determined on a case-by-case basis), the nominee may become the permanent custodian of the assets.

Rights and responsibilities of a fixed deposit nominee

It is important to understand the rights and responsibilities of a fixed deposit nominee:

Rights of a Nominee:

  • Receive the funds from the FD after the depositor's demise.
  • Distribute the funds among all legal heirs according to succession laws or the will.

Responsibilities of a Nominee:

  • Safeguard the assets until they are distributed to legal heirs.
  • Act as a trustee and ensure fair distribution of assets.
  • Keep all relevant documents, such as death certificates and proof of relationship, handy for legal procedures, if required.


Appointing a fixed deposit nominee is a crucial step in ensuring that your hard-earned money benefits your loved ones even after you're gone. Remember to provide accurate details, keep information updated, and choose your nominee carefully. By doing so, you can protect your family from legal hassles and provide them with financial security when they need it the most.

As you embark on this financial journey, Mahindra Finance is here to offer support. From providing various investment options to offering guidance on financial planning, Mahindra Finance can help you make informed decisions about your future. Explore our range of services today and secure your family's financial well-being with confidence.


Q: How many nominees can I have for my fixed deposit?

You can nominate multiple individuals for your fixed deposit. Specify the percentage share of each nominee to ensure a fair distribution of funds among them.

Q: What are the rights of a fixed deposit nominee?

The nominee has the right to receive the funds from the FD after the depositor's demise. They are responsible for distributing the assets among all lawful heirs according to succession laws or the will.

Q: Can I change my nominee for an existing fixed deposit?

Yes, you can change your nominee for an existing fixed deposit. Contact your bank or financial institution to update the nomination details and ensure accuracy.

If a nominee refuses to distribute the assets to legal heirs, they can face legal consequences. Legal heirs can approach the court and file a case against the nominee for not fulfilling their responsibilities.

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