A nominee in a demat account is the person recorded to receive the securities in that account after the account holder’s death, through the transmission process. Nomination is the facility through which an individual names a person who can claim the securities held in the demat account in the event of death.
Why Nomination Matters
If there is no nominee, the family may have to produce more documents to get the securities transmitted. With a nominee in place, the process is usually simpler. Transmission is the process through which securities of a deceased account holder move to the nominee, legal heirs, successors, or surviving joint holders, depending on the case. Only an individual can be a nominee. A company, trust, society, partnership firm, or HUF cannot be named as nominee. Both NSDL and CDSL state this clearly. A nominee can be: Spouse Child Parent Sibling Any other individual Yes. A minor can be named as nominee, but guardian details have to be recorded. Depository’s nomination process and forms require guardian information where the nominee is a minor. A demat account can have up to three nominees. If there is more than one nominee, the account holder has to mention the percentage share for each nominee. There were discussions in the industry about increasing the nominee limit, but the standard for Demat accounts remains up to three nominees. If multiple nominees are added, the total percentage of share must equal 100%. For demat accounts, the account holder is expected to either: Add a nominee, or Formally opt out of nomination SEBI initially mandated that accounts would be frozen for debits if no nomination was made. But SEBI later removed the condition. You can usually do it online or offline through your broker or DP. Most brokers provide a nomination section inside the account settings or profile area. Depositories provide an online nomination flow where the account holder enters DP ID, Client ID, and PAN, and then completes OTP-based verification. The usual process is: Log in to your broker or DP portal Open the nomination section Enter nominee details Add guardian details if the nominee is a minor Specify percentage share if there is more than one nominee Confirm through OTP or e-sign You can also submit a physical nomination form to the DP. Yes. A nominee can be added, changed, updated, or removed later through the same DP or broker process. SEBI’s review of nomination rules also note that there should not be a restriction on how many times an investor can change the nominee. In a joint demat account, the nominee does not come first if one holder dies. The securities first move to the surviving joint holder or holders. The nominee becomes relevant after the death of the sole holder or all joint holders, as the case may be. Not automatically in every legal sense. A nominee helps with transmission of securities. Final ownership can still depend on succession law, legal heirs, or a will. So nomination is useful, but it is not a replacement for estate planning. The common ones are simple: Not adding a nominee at all Assuming a will makes nomination unnecessary Not updating nominee details after marriage, divorce, or death in the family Naming a minor but adding incorrect guardian details Confusing nomination with final inheritance A nominee in a demat account is the person recorded to claim the securities more easily after the account holder’s death. Only an individual can be nominated, up to three nominees can be added, and a minor can be named if guardian details are provided. In a joint account, surviving holders come first, and the nominee becomes relevant only after all joint holders are dead.Who can be a nominee in a demat account?
Can a minor be a nominee?
How many nominees can be added?
Is nomination mandatory?
How to add a nominee in a demat account?
Online
Offline
Can you change or remove a nominee later?
What happens in a joint demat account?
Does a nominee become the final owner?
Common mistakes
Conclusion