Navigating the aftermath of a loved one's passing involves not only emotional tribulations but also the
practicalities of managing their financial legacy. For many, Fixed Deposits (FDs) stand as pillars of financial
stability, offering security and steady returns. However, the question arises: what happens to these investments
after an account holder is no more?
Fixed Deposits, renowned for their low-risk nature and assured returns, can be established individually or jointly,
offering flexibility in ownership. Yet, upon the demise of the account holder, understanding the intricacies of FD
management becomes paramount.
The transition of a Fixed Deposit after death necessitates a grasp of procedural intricacies. It's crucial to
understand the mechanisms of what happens to a Fixed Deposit after death of an account holder, how to claim a Fixed
Deposit after death, and the broader implications of Fixed Deposit after death.
How to claim a Fixed Deposit after an account holder's demise?
In unfortunate circumstances, it's possible that an FD account holder may pass away before the investment reaches
maturity. When this happens, relatives must understand how to claim the Fixed Deposit after death. The procedure to
access both the principal and the accumulated interest can differ, depending on the type of FD
account held.
Joint accounts
The course of action for accessing a Fixed Deposit
after an account holder's demise hinges on the kind of joint account held.
1. Latter or survivor
In this joint account format, if the initial holder (latter) passes away,
the second holder (survivor) assumes control of the Fixed Deposit, essentially becoming the primary holder. Access
to the Fixed Deposit after death is reserved for the surviving holder, with the nominee entitled to the original
deposit plus accrued interest only after the demise of both depositors. If no nominee is designated, legal heirs
have the right to claim the FD amount.
2. Former or survivor
In this joint account format, if the first account holder (former) passes
away, the second holder (survivor) gains the right to withdraw the Fixed Deposit. A death certificate is necessary
for the second holder to initiate the claim. If the passing of both account holders occurs, the nominee is entitled
to the funds. Absent a nominee, legal heirs can retrieve the Fixed Deposit after death.
3. Anyone or survivor
In instances where more than two individuals hold the Fixed Deposit, the
remaining balance and interest are transferred to the surviving account holders when one passes away. Nominees are
granted the accumulated funds if all holders are deceased. Without a nominee and with one or more holders still
alive, they, along with the deceased's legal heirs, are entitled to the Fixed Deposit. If all depositors die without
nominating anyone, the legal heirs are eligible to claim the Fixed Deposit.
4. Either or survivor
In scenarios where any one of the account holders passes, the available
balance in the account is paid to the survivors. The nominee is allocated the funds only in the event of the demise
of all account holders. Should there be no nominees, the Fixed Deposit amount is then claimed by the legal heirs.
Single account holders
1. Without nomination
In these instances, to manage an account holder's Fixed Deposit after
death, family members must submit the deceased's succession certificate or the will. This step is required for legal
heirs to gain access to the funds when no nominee is in place.
2. With nomination
If a nominee is assigned, they must present the deceased’s death certificate
to withdraw the available funds from the account. Furthermore, the nominee must provide proof of identity to proceed
with the Fixed Deposit after-death claim.
Process to claim the Fixed Deposit amount
Navigating the claim process for an FD after the account holder's demise involves key steps to ensure a smooth and
compliant transfer of funds.
- Documentation: Provide the deceased's death certificate, claimant's identification, and a
completed claim form.
- Verification: A bank confirms the authenticity of documents and that the claim aligns with bank
policies.
- Payout: Upon successful verification:
- The FD balance, including interest accrued until the holder's death, is transferred to the claimant.
- Alternatively, the FD may be maintained until its due maturity date, if the claimant prefers.
Also Read: Top
5 reasons to open a Digital Fixed Deposit
Conclusion
Losing a loved one is challenging, and the financial responsibilities that follow can add to the stress. However,
understanding the process of claiming FDs after death can mitigate some financial uncertainties.
Axis Bank's Fixed Deposits blend convenience with growth, starting with just ₹5,000 and flexible tenures of up to 10
years. Whether for short-term gains or long-term saving plans, these digital solutions ensure a smooth investment
journey and secure earnings.
FAQs
Q. Can I appoint more than one nominee for my FD account?
Yes, banks allow the appointment of
multiple nominees for an FD account. The account holder must specify the share percentage for each nominee to avoid
confusion in the future.
Q. How is the payment from the deceased FD account distributed?
If there are multiple nominees,
the distribution is according to the specified shares. In the absence of nomination, the legal heirs receive the
amount, divided as per the legal heir certificate or succession certificate.
Q. Can the nominee continue FD after the death of the account holder?
Nominees can continue the
FD until maturity or claim the accumulated amount immediately. The choice depends on the nominee's financial needs
and preferences.
Q. Is it compulsory to appoint a nominee for FD?
Appointing a nominee is not mandatory but highly
recommended. It simplifies transferring the FD upon the account holder's death, ensuring a smoother financial
transition during difficult times.
Disclaimer: This article is for information purpose only. The views expressed in this article
are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd.
and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader
for taking any financial decisions based on the contents and information. Please consult your financial advisor
before making any financial decision.
