Investing · 8 min read
Nomination: what actually happens to your money when you die
A nominee is a receiver, not an owner. What that distinction means in practice, and the accounts where nobody is named at all.
Krish Dalal
Founder and editor, PaisaExpert. Master's in Business Management, SP Jain School of Global Management, London. · Last updated 2026-09-05
Most people have never checked. They opened a demat account in a hurry, skipped the nomination field because it was optional, and have not thought about it since. SEBI has now made it compulsory to either name someone or formally refuse for new single-holder accounts, which tells you how large the pile of unclaimed money had grown.
Nominee is not the same as heir
This trips up almost everybody. If you name your brother as nominee on a mutual fund folio and leave everything to your spouse in your will, the fund house pays your brother and your spouse has the legal claim. The nominee holds the money in trust for whoever is legally entitled to it.
- Nomination decides who the institution can safely pay. It discharges their obligation.
- A will decides who owns it. If the two disagree, the will governs, but the money has already moved.
- Where there is no will, succession law decides, and which law applies depends on your religion.
- The clean position is a nominee and a will that name the same person. That is what avoids a dispute inside a grieving family.
The new rules for demat and mutual funds
- From 1 September 2026, a new single-holder demat account or mutual fund folio needs either a nomination or a signed opt-out.
- You can name up to three nominees and assign a percentage to each.
- Only the name and the relationship are compulsory, plus a date of birth if the nominee is a minor.
- Nomination stays optional for jointly held accounts.
- Your intermediary must remind you twice a year if you have done neither. Those messages are worth reading.
The accounts people forget
Nomination is not one job, it is several, and the ones that get missed are the ones opened long ago.
| Where | How it is named | Commonly forgotten |
|---|---|---|
| Bank accounts | Nomination form at the branch or in net banking | Old accounts opened before nomination was routine |
| Demat and mutual funds | Nomination or opt-out with the broker or RTA | Folios held directly with an AMC rather than through an app |
| EPF | e-nomination on the EPFO member portal | Almost universally skipped, and it blocks the pension claim |
| PPF and small savings | Form at the post office or bank | Nomination made decades ago naming someone since deceased |
| Insurance | Nominee in the policy document | Policies bought through an employer |
What to do next
- List every account you hold, including old ones, and check each for a registered nominee.
- Do the EPF e-nomination first if it is missing.
- Make sure your nominee and your will name the same people, and tell those people the accounts exist.