How to Claim FD After Death: Nominee vs Legal Heir Rules

If a parent or spouse has died leaving fixed deposits, the bank will pay the money to the nominee or surviving joint holder on a simple claim form, death certificate and KYC, or to the legal heirs with a few extra documents if no nominee exists. As of October 2026, RBI requires banks to settle such claims within 15 calendar days of getting complete documents, and to let the FD be closed early without any penalty.

This guide is only about fixed deposits: which route applies to you, what to submit, how interest is paid on an FD that is broken or matures after death, and where to complain if the branch delays. For savings accounts, lockers, mutual funds and insurance together, see our wider guide on bank accounts and investments after death.

First, find out which route applies

Look at the FD receipt, passbook or the deceased's net banking. Three details decide everything: whether a nominee is registered, whether the FD is joint, and the mode of operation.

These are the rules under RBI's Settlement of Claims in respect of Deceased Customers of Banks Directions, 2025, issued in September 2025, which banks had to put in place by 31 March 2026. Banks may set a higher simplified-procedure limit than RBI's, so ask your branch.

Since 1 November 2025, the Banking Laws (Amendment) Act, 2025 also lets depositors name up to four nominees for a deposit, either simultaneously (each gets a fixed share, adding to 100%) or successively (the next in line gets paid only if the earlier one has died). If the FD was opened or updated after that date, check which type was chosen.

Step-by-step claim process

Before you go to the bank

1. Collect the death certificate. Get several attested copies; every bank and insurer will want one.
2. List all FDs. Check the deceased's passbooks, email, SMS alerts, Form 26AS/AIS for interest income and bank statements for FD interest credits. If you suspect deposits you do not know about, search the RBI's UDGAM portal for unclaimed deposits.
3. Inform the bank in writing. This stops further auto-renewals and standing instructions in the deceased's name.

At the branch

4. Ask for the deceased claim form. RBI requires banks to use standard formats, available at every branch and on the bank's website. You can lodge the claim at any branch of the bank, and you should get an acknowledgement. Some banks also accept claims online.
5. Attach the documents for your route (table above). A nominee or survivor does not need a succession certificate or an indemnity, whatever the amount.
6. State what you want done with the FD: close it now, or receive it on maturity. Write it on the claim form or in a covering letter.
7. Note the date of the acknowledgement. The 15-day clock starts from the date the bank has all required documents, so ask the branch to confirm in writing that nothing is pending.

If there is no nominee

8. Below the threshold: legal heirs submit the claim form, death certificate, their KYC, a bond of indemnity, a no-objection letter from the other legal heirs and a legal heir certificate or a declaration from an independent person acceptable to the bank. No third-party surety is required.
9. At or above the threshold: the bank can ask for a succession certificate from a civil court, or a legal heir certificate or affidavit sworn before a notary or magistrate, and may also call for a surety bond. If there is a registered Will, the bank may ask for probate depending on the state and the amount.

Early closure and interest after death

RBI requires banks to include a clause in the account opening form allowing premature termination of a term deposit on the depositor's death without any penal charge, even inside a lock-in period. So the usual 0.5% to 1% penalty explained in our guide to FD premature withdrawal penalty does not apply. Interest is paid at the bank's rate for the period the deposit actually ran.

For a joint FD, early closure needs the consent of the surviving holders and the deceased's legal heirs, unless all holders had given a specific joint mandate at opening.

If the FD has already matured before the claim is settled, the interest for the gap between maturity and payment is set by the bank's board-approved deposit policy, so ask the branch what rate it will pay. Auto-renewal instructions may or may not continue after death depending on the bank.

Worked example (illustrative)

Ramesh had a ₹5,00,000 cumulative FD for 5 years at 7%, compounded quarterly. He died 2 years into the term. He had named three simultaneous nominees: his wife 50%, son 30% and daughter 20%.

• The family asks for early closure. There is no penalty. Suppose the bank's card rate for a 2-year deposit was 6.8%.
• Value after 2 years at 6.8% compounded quarterly: ₹5,00,000 × (1 + 0.068/4)^8 = ₹5,00,000 × 1.14437 ≈ ₹5,72,187.
• Split: wife 50% = ₹2,86,093; son 30% = ₹1,71,656; daughter 20% = ₹1,14,437. Total ₹5,72,186 (the ₹1 difference is rounding).

Had there been a penalty of 1%, the rate would have been 5.8% and the payout about ₹5,61,030, so the no-penalty rule saved the family roughly ₹11,150. You can try your own numbers with our FD calculator. Actual rates depend on the bank.

Nominee vs legal heir: who finally owns the money

Paying the nominee gives the bank a full legal discharge, which is why the nominee route is fast. But the Supreme Court and several High Courts have held that a nominee in a bank deposit generally receives the money as a trustee for the legal heirs, not as the owner. Who finally owns it is decided by the deceased's Will or, if there is none, the succession law that applies to the family.

In practice:

• If the nominee is also the only heir (for example, a spouse where there are no other Class I heirs), nothing more is needed.
• If there are other heirs, the family should agree on the division in writing. The nominee then transfers shares from his or her own account.
• If there is a dispute, heirs can approach a civil court. The bank will usually still pay the nominee unless it receives a court order restraining payment.

Tax and TDS points

• Interest earned up to the date of death is the deceased's income; the legal heir may need to file the deceased's final income tax return as the legal representative on the e-filing portal.
• Interest after death belongs to whoever is entitled to the money. Any Form 15G/15H the deceased had filed stops being valid, so TDS may be deducted on later interest.
• Keep the bank's interest certificate for the year of death.

Rules can vary with the facts, so a tax professional can help where amounts are large.

When the bank delays: compensation and escalation

Our guide on what to do when a bank does not resolve a complaint explains the Ombudsman route under the 2026 scheme step by step.

Sample letter to the branch

To: The Branch Manager, [Bank, Branch]
Subject: Settlement of deceased depositor claim - FD No. [number]

[Name of depositor], holder of FD No. [number], died on [date].
I submitted the claim as [nominee / surviving joint holder / legal heir]
on [date] with all documents (acknowledgement No. [number]).

Under RBI's directions on settlement of claims of deceased customers,
the claim should be settled within 15 calendar days of complete
documents. Please settle it by [date] by [premature closure without
penalty / payment on maturity] and credit account No. [number].

If there is a delay on the bank's part, please pay compensation at
Bank Rate + 4% per annum as per the same directions.

Name, mobile, relationship to depositor

What not to do

• Do not use the deceased's net banking, debit card or cheque book to move FD money; it can be treated as unauthorised use and complicate the claim.
• Do not pay agents who promise "fast death claims". The process is free and standard at the branch.
• Do not share OTPs, PINs or documents with callers claiming to be from the bank's "claims department"; banks do not call to collect fees for claims.
• Do not search for customer care numbers online. Use the number on the bank's official website or passbook.
• Do not sign a no-objection letter without understanding that you are giving up your claim to that money.

Key takeaways

• Nominees and surviving joint holders claim with just a claim form, death certificate and KYC, at any branch, for any amount.
• Without a nominee, the simplified process applies below ₹15 lakh (₹5 lakh at co-operative banks); above it, a succession certificate or similar may be needed.
• RBI requires settlement within 15 calendar days of complete documents, with Bank Rate + 4% compensation for bank-caused delay.
• An FD can be closed early on death without any penalty.
• A nominee usually holds the money for all legal heirs; agree the division in writing to avoid disputes.