A fixed deposit is a financial investment product offered by banks and NBFCs where an investor deposits a lump sum of money for a fixed period of time. During this period, the investor earns interest on the deposited amount at fixed intervals. The interest rate and maturity period may vary depending on the type of fixed deposit chosen by the investor.
In case of the demise of the FD holder, the FD amount is transferred to the nominee or legal heir of the deceased person. In this article, we discuss how to claim the FD amount on the death of the account holder, the documents required to file the claim, the process, and other related information that needs to be considered when filing a claim.
How to claim FD amount in case of different accounts?
An individual account with a nominee
In this situation, the nominee may submit the account holder's death certificate and the KYC paperwork to obtain the FD maturity value. Additionally, the nominee must provide the required forms of identification.
An individual account without a nominee
If the account holder failed to choose a nominee, the legal heirs may file a claim form together with the account holder's death certificate and succession certificate to be eligible to collect the FD value. A legal heir is someone who is legally entitled to inherit money if the account holder dies.
Joint account with ‘Latter or Survivor’ clause
In this kind of joint account, the second account holder will take the role of the primary holder and can manage the FD account on the demise of the first account holder. The nominee will only receive the principal sum and accrued interest if both depositors pass away. The legal heirs have access to the FD amount if no nominees have been added to the account.
Joint account with ‘Former or Survivor’ clause
Only in the case of the first account holder's decease may the second holder withdraw the FD amount. The second account holder must provide the death certificate of the first account holder in order to obtain the funds. In the event that both account holders have passed away, the nominee is entitled to the money. In the absence of a nominee, the legal heirs may withdraw the available amount of FD.
Joint account with ‘Anyone or Survivor’ clause
In the event that there are more than two account holders, the survivors of any deceased account holders will be given the remaining balance in the account as well as any accrued interest. In the event that all account holders pass away, the sum will be distributed to the nominee.
The amount will be distributed to the depositors who are still living and the lawful heirs of the account holders who have died away if one or more account holders have passed away and no nominations have been added. If no nominations have been added and all depositors pass away, the funds will be distributed to the account holders' legal heirs.
Joint account with ‘Either or Survivor’ clause
If one of the account holders passes away under such a plan, the remaining amount will be paid to the remaining account holders. Only in the event that every account holder has passed away would the nominee be given the money. If there are no more nominations, the money will be distributed to the legitimate heirs.
How to claim the FD amount on the death of the account holder?
The process of claiming the FD amount on the death of the account holder may vary depending on the bank or NBFC where the FD was opened. However, the general steps are as follows:
Collect necessary documents: The first step in claiming the FD amount is to collect all the necessary documents. These include the original FD document, death certificate of the deceased, KYC documents of the claimant, identity proof, address proof, indemnity bond and any other documents that may be required by the bank or NBFC.
Fill out the claim form: The next step is to fill out the FD claim form. This form should have details such as the name and address of the claimant, date of death of the FD holder, account number of the FD, amount invested and the maturity date.
Submit the documents: Once all the documents are collected and the forms are filled, the claimant needs to submit the documents to the bank or NBFC.
Verification process: Once the documents are submitted, the bank or NBFC will verify all the documents and initiate the process of transferring the FD amount to the claimant.
Transfer of FD amount: After the verification process is complete, the bank or NBFC will transfer the FD amount to the nominated bank account of the claimant.
It is crucial to comprehend how the funds might be reclaimed in the event that the account holder is no more. In the absence of the account holder, it is important to make sure that the money are transferred to the appropriate party.