Nomination guide for NRIs: bank accounts, mutual funds and demat
Nomination allows the nominated person to receive assets on the account holder's death without court proceedings. NRIs should add nominations to all NRE/NRO accounts, mutual fund folios, demat accounts and insurance policies. Without nomination, legal heirs face delays and must obtain succession certificates.
Always nominate — it saves months of legal process for heirs
NRIs should add nominations to every Indian financial account — NRE/NRO bank accounts, mutual fund folios, demat accounts and insurance policies. A nominee can receive assets promptly on death without court orders. Without a nominee, legal heirs must obtain a succession certificate, which can take months and significant cost.
Key points
- Nomination speeds up succession — A nominee receives assets within days of submitting a death certificate — legal heirs without nomination face months of court process.
- Nominate in each account separately — Nomination is per-account — nominating in your bank account does not cover your demat or mutual funds.
- NRI can nominate a resident Indian — NRIs can nominate a resident Indian family member for all financial accounts in India.
How to add or update nominations
Bank accounts (NRE/NRO): log in to net banking → Profile/Services → Nomination. Most banks allow online nomination updates. Alternatively, submit Form DA1 at the branch.
Mutual funds: log in to each AMC's portal or MF Central → Update Nominee. SEBI now requires all MF investors to add a nomination (or explicitly opt out) by a specified deadline.
Demat account: submit the nomination form to your DP (Depository Participant — broker or bank). Online update available for most brokers.
Life insurance: nomination is set at policy issuance. Update via the insurer's portal or branch with a nomination change form.
NPS: nomination is submitted at enrolment and updated via the CRA (NSDL or Karvy) portal.
Nomination vs legal heir
A nominee is an interim trustee, not necessarily the legal owner — the legal heir may claim assets from the nominee if no will exists. However, for bank deposits, SEBI-regulated securities and insurance, the nominee has a legal right to receive the proceeds after SEBI/RBI reforms.
Best practice: ensure your will and nominations are consistent. If the nominee and the beneficiary under the will are the same person, there is no conflict.
Frequently asked questions
Can an NRI nominate an overseas person?
Yes. An NRI can nominate another NRI or a foreign national for Indian financial accounts, though repatriation by the overseas nominee will be subject to FEMA rules.
What happens to an NRE account without a nominee?
The surviving joint holder (if any) takes over. If there is no joint holder and no nominee, the legal heir must produce a succession certificate, probate or letters of administration depending on state law — a process that can take months.
Is nomination mandatory for NRI accounts?
Nomination is not legally mandatory for all accounts, but SEBI has made it effectively mandatory for demat and mutual fund accounts (opt-out allowed with a declaration). Most banks strongly encourage it.