Nominee is important at the time of saving and investing!  Know what is the rule

Nominee is important at the time of saving and investing! Know what is the rule

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What is Nominee: A nominee is required at the time of opening a savings account in a bank, while taking an insurance policy or at the time of investment. In some cases, it has been made necessary to mention the nominee. If you trade in the stock market, it is necessary to include the name of the nominee in your demat account. If you have not made a nominee, then make a nominee before March 31. Because after March 31 the demat trading account will become inactive. Similarly, it is necessary to mention the name of the nominee in the PF account.

Most of the people are not aware of the importance of nominee in bank account or investment. After the death of the investor or the account holder, his family members have to face a lot of difficulties in withdrawing money. In many cases, it has also been seen that in the absence of a nominee, all the money of the investor goes into the account of the institution.

It has often been seen that due to wrong information about the nominee, many people shy away from mentioning the nominee. Many people think that as soon as the nominee’s name is registered, he will be entitled to his property or savings. However, it is not like that. Actually, the nominee is only the caretaker of the money or property and not the entitled. After the death of the investor, the nominee is required to hand over the money or property to the legal heirs of the investor. However, the nominee and the legal heir can be the same.

Nominee is required
Nomination has become very important for all types of savings accounts and investments so that after the death of the account holder, the entire amount in his account can be given to his nominee. Investors can make their nominee their spouse, their children, parents, any other family member or any of their friends.

Where is the nominee needed?
We need a nominee at many places like- while taking a life insurance policy, while opening a bank account or making investments. You can have more than one nominee in a life insurance policy. It would be better if the parents, wife or child should be appointed as their successor in the insurance policy.

You can also nominate a relative or a friend while opening a bank account. While investing, only one person can be made a nominee.

e-nomination
Nomination in Employees’ Provident Fund (EPF) is mandatory. Here you can file e-nomination. For e-nomination, the account holder can nominate only his family members. For e-nomination, you have to upload your Aadhaar number, address, date of birth, mobile number, bank account and scanned photograph of the nominee on the portal.

Tags: bank account, Investment tips

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