Demat Account Nomination - How to Add Nominee

Definition

Demat accounts play a crucial role for holding securities electronically. To protect your investments, it’s important to take necessary precautions. Adding a nominee to your demat account is one effective way to ensure your holdings are secure. By designating a nominee, such as a spouse, child, or parent, you provide your loved ones with financial support in case of any unforeseen circumstances.

Who is a Nominee?

A nominee is an individual you designate to inherit the assets in your demat account upon your passing. This person is entrusted with the responsibility of managing and transferring the securities held within the account. Choosing a reliable and trustworthy nominee is essential, as they will need to handle your assets and distribute them according to your preferences.

Importance of Appointing a Nominee in your Demat Account

When a demat account holder passes away, the heirs often face significant challenges in claiming ownership of the securities left behind. This is why it’s vital to designate a nominee for your demat account. Having a nominee simplifies the transfer process, eliminating the need for complex documents such as a succession certificate or transmission certificates. 

Appointing a nominee to your demat account acts as a crucial safeguard for your investments. In the unfortunate event of your passing, the nominee can quickly take ownership of the securities, bypassing the need for complex legal procedures. This ensures that your beneficiaries avoid the lengthy probate process, allowing for a smooth and timely transfer of assets to your loved ones.

Furthermore, an account holder can nominate up to three individuals, ensuring that your assets are transferred smoothly to trusted beneficiaries without unnecessary delays or legal hurdles.
 

Need for a Nominee

In the presence of a nominee, the transmission of shares becomes a lot easier. The nominees do not have to move to the court or gather a No Objection Certificate and affidavits from the courts.
However, if a nominee has not been preordained, the family members may not receive the shares or funds. According to the reports from RBI, there are thousands of instances where unclaimed deposits lie in the banks across the country. These accounts belong to those who either have not claimed the money or the account holder has deceased or has not filed nomination details.

If a single demat account holder passes away, leaving a nominee, the share transmission process is simple. The nominee will have to submit a duly filled transmission form and a certified copy of the deceased person’s death certificate that a Gazetted Officer has attested.
 

How to add Nominee’s name in 5paisa Demat Account

5paisa makes it easy to add the name of the Nominee to any Demat account. 

Through the App 

Step 1: Log in to 5paisa Mobile App

Step 2: Click on User (At bottom)

Step 3: Click on Your Name (At the Top-Left)

Step 4: Top right-click on Manage

Step 5: Click Nominee Details

Step 6: Add/Update Nominee or Opt-Out

Step 7: E-sign

Through Web

Step 1: Log in to 5paisa.com

Step 2: On top right Click on Profile Icon

Step 3: Click on Profile

Step 4: Click on My Profile

Step 5: Click on Nominee Details

Step 6: Add/Update Nominee or Opt-Out

Step 7: E-sign

Factors to consider while adding a nominee in demat account

• Only an individual holding a beneficiary account can provide a nominee.  Non-individuals such as society, body corporate, partnership firm, Karta of HUF, or a power of attorney holder are not allowed to do so
• For a jointly held beneficiary account, the nomination form has to be signed by all account holders
• A nominee cannot be assigned by a minor. However, a minor can be assigned as a nominee by an adult beneficiary by providing the name and address of the minor’s guardian.