Bank Accounts and Investments After Death: How to Claim

When someone dies, their bank accounts, deposits and investments do not vanish or go to the government. They are paid to the nominee or surviving joint holder on a simple claim, or to the legal heirs if no nominee exists, which needs more paperwork. As of October 2026, banks must settle deposit claims within 15 days of receiving complete documents, and each asset type (bank, demat, mutual fund, EPF, insurance) has its own claim route.

This guide covers what to do, in what order, and how to avoid the common delays.

First steps after a death

1. Get several certified copies of the death certificate from the municipal body or gram panchayat. Every institution will want one.
2. List every asset. Check passbooks, email inboxes, SMS alerts, ITRs (Form 26AS and the Annual Information Statement show interest, dividends and investments), CAS statements from CAMS/KFintech and NSDL/CDSL, and insurance policy documents.
3. Inform each institution in writing. The bank will stop debits, which also stops auto-debits and standing instructions.
4. Do not use the deceased's debit card, UPI or net banking. Withdrawing money this way after death can be treated as unauthorised, even by family.
5. Check for loans. Outstanding loans are recovered from the estate, not personally from heirs, unless someone was a co-applicant or guarantor. See co-applicant and guarantor liability.

Who gets the money: nominee, joint holder or legal heir

Nominee is a trustee, not always the owner. The nominee gives the bank a valid discharge. Courts have repeatedly held that nomination does not override a Will or succession law. For shares, the Supreme Court in Shakti Yezdani v. Jayanand Jayant Salgaonkar (2023) held that a nominee does not become the absolute owner. So the nominee may have to hand over the money to the legal heirs.

Bank accounts, FDs and lockers

The RBI's Settlement of Claims in respect of Deceased Customers of Banks Directions, 2025, which banks had to implement by 31 March 2026, standardised the process. As of October 2026:

• 15-day deadline: deposit claims must be settled within 15 calendar days of the bank receiving all required documents.
• Compensation for delay: if the delay is the bank's fault, it must pay interest at the Bank Rate plus 4% a year on the amount for the delay period. For lockers, delay attracts ₹5,000 per day.
• Simplified procedure without a nominee: for claims up to ₹15 lakh at commercial banks (₹5 lakh at co-operative banks), banks settle on a claim form, death certificate, KYC, an indemnity and declarations from heirs. No surety is required for claims within this limit.
• Fixed deposits can be closed early by the claimant without a premature-withdrawal penalty in most banks' policies, or allowed to run to maturity.

Up to four nominees. From 1 November 2025, the Banking Laws (Amendment) Act, 2025 lets depositors name up to four nominees. Simultaneous nominees share the money in fixed percentages adding to 100%. Successive nominees take one after another in priority order. Lockers and safe-custody articles allow only successive nomination.

Worked example: a claim and a delay

Ramesh dies with a savings account of ₹4.2 lakh and an FD of ₹10 lakh at a private bank. He named three simultaneous nominees: wife 50%, son 30%, daughter 20%. Total: ₹14.2 lakh.

The family submits complete documents on 1 November. The 15-day deadline is 16 November, but the bank pays on 6 December, a delay of 20 days attributable to the bank.

The Bank Rate is 5.75% after the RBI's October 2026 policy, so compensation is at least 5.75% + 4% = 9.75% a year:

₹14,20,000 × 9.75% × 20 ÷ 365 ≈ ₹7,586, paid on top of the claim and split in the same ratio.

Had there been no nominee, the amount of ₹14.2 lakh is still within the ₹15 lakh simplified threshold, so the heirs would not need a succession certificate.

Mutual funds and demat accounts

• Mutual funds: the nominee or joint holder applies to the AMC or registrar (CAMS or KFintech) with a transmission request form, death certificate and KYC. The units are transferred into the claimant's name; they do not have to be redeemed. SEBI does not allow AMCs or depositories to demand affidavits or indemnity bonds from registered nominees.
• Demat accounts: the claimant submits a transmission form and death certificate to the depository participant. Shares move to the claimant's demat account.
• Without a nominee: expect an indemnity, legal heir documents and, for larger values, a succession certificate or probate.

SEBI revised the nomination framework for demat accounts and mutual fund folios again with effect from 1 September 2026, including making nomination the default for new single-holder accounts unless the investor opts out. Check your depository participant or AMC for the current limit on the number of nominees.

Transmission is not a sale for tax purposes. The heir takes over the original cost and holding period, so capital gains tax arises only when the heir sells. Details are in capital gains tax on mutual funds.

EPF, PPF, NPS and small savings

Life and health insurance

The nominee files a death claim with the insurer, attaching the policy document, death certificate, ID and bank details, and for some deaths a post-mortem or FIR. If the claim is wrongly rejected or delayed, escalate to the insurer's grievance officer, then the IRDAI Bima Bharosa portal, then the Insurance Ombudsman.

Unclaimed money and the 10-year rule

Bank balances that stay inoperative for 10 years, and term deposits not claimed within 10 years of maturity, are transferred to the RBI's Depositor Education and Awareness (DEA) Fund. The money is not lost. Search for it on RBI's UDGAM portal, then claim it from the bank concerned, which pays with applicable interest.

Unclaimed dividends and shares go to the IEPF after seven years and can be reclaimed through an IEPF-5 application.

Tax and paperwork after death

• File the deceased's final ITR. The legal heir registers as a representative assessee on the income-tax e-filing portal and files the return for income up to the date of death.
• Income after death (interest, dividends) is the heir's or the estate's income, not the deceased's.
• India currently has no inheritance or estate tax.

How to make this easier for your family

1. Add nominees to every bank account, FD, demat, folio, PPF, EPF and insurance policy, and review them after marriage, divorce or a death in the family.
2. Write a registered Will; nominees are custodians, the Will decides ownership.
3. Keep an updated asset list with account numbers and contact points in a place your family knows.
4. Use "Either or Survivor" joint accounts for household money.
5. Make sure your term insurance cover and emergency fund will tide the family over the weeks claims take.

Key takeaways

• Nominees and surviving joint holders claim quickly; legal heirs without a nominee face more paperwork.
• As of October 2026, banks must settle deceased depositor claims within 15 days of complete documents, or pay Bank Rate + 4% for the delay.
• Without a nominee, commercial banks use a simplified process up to ₹15 lakh, so a succession certificate is not always needed.
• Up to four bank nominees are allowed from 1 November 2025; nomination does not override a Will or succession law.
• Unclaimed deposits go to RBI's DEA Fund after 10 years but can be traced on UDGAM and claimed from the bank.