While opening a Bank Account or applying for an investment like a Fixed Deposit, Recurring Deposit, or Mutual funds, you may notice a column in the form wherein you are required to enter the nominee details. While it is not a mandatory requirement to have a nominee, it is highly recommended. So, have you ever wondered what is the purpose of adding a nominee to your Bank Account? Let's explore the reasons for adding a nominee to your Bank Account.
What is a Bank Account Nomination?
Nomination in Bank Account means adding a family member as the account’s beneficiary. In case of the account holder's unfortunate demise, the nominee receives the funds available in the account.
Apart from bank accounts, you're also required to add a nominee to your Fixed Deposits, Recurring Deposits, and other Demat Accounts for the same reason.
Why do you need to add a Bank Account nominee?
A nominee can help you streamline your finances and ensure a smooth transition of assets to family members in case of your absence. Let's look at how it can help you through different stages of your life.
If You're Single with Dependents
If you're single but have people who depend on you financially, it makes sense to add a nominee to your Bank Savings Account. You can consider adding either of your parents or siblings as an account nominee.
If You're Married and Have Children
Adding a nominee to the Bank Account ensures that the spouse or children of the account holders get access to the savings in case of their death.
If you add a nominee to your Bank Account who is a minor child, you'll also have to assign an adult guardian who will be responsible for safeguarding the funds until your child becomes an adult.
Bank Account Nomination Rules
There are no mandatory bank account nomination rules. You can open a new account without adding a nominee. But if you are appointing someone as a nominee, here are some tips that you should remember:
- You can only choose a single person as your account nominee.
- When selecting a nominee, ensure that you choose a family member as a nominee.
- Provide complete nominee details, including their full name, age, address, and relationship with the account holder.
- After opening the account, you can modify or cancel the nominee as and when you want.
- It is recommended to update nominee details after significant life events, like marriage, birth, divorce, remarriage, death of the nominee, etc.
Whether you have a Fixed or Recurring Deposit Account with us, you can add or update a nominee using our AU 0101 App/NetBanking. Here’s how.
Using AU 0101 App:
- Login to AU 0101 App and tap on ‘Service Request.’
- Choose the type of account i.e, FD/RD
- Click on add/update nominee.
- Select the account number to add or update nominee.
Using AU 0101 NetBanking
- Login to AU 0101 NetBanking.
- Click on the Service Request icon.
- Choose FD/RD Account and select add/update Nominee.
- Choose the account type and account number to add or update Nominee.
- Confirm the details and verify them using OTP received on your registered mobile number to complete the process.
Opening a Fixed Deposit Account with AU Small Finance Bank not only helps you generate high interest rates but also helps you accumulate a sufficient amount of funds. In the event of your untimely demise, the proceeds of the account are offered to the beneficiary. Thus, adding a nominee is always a wise decision.
Existing customers can easily apply for an FD/RD Account through our AU 0101 App or AU 0101 NetBanking. If you do not have an account with us, you can still open a bank account with the help of our AU Video Banking.