Nomination in Demat Account: How to Add Nominee in Demat Account Online?

In the world of digital finance, demat accounts have become a necessity for holding securities electronically. As with any valuable asset, it is essential to safeguard your investments. One way to ensure your holdings are protected is by adding a nominee to your demat account. If you have children, spouse or parents as your dependents, this ensures they have financial support in your absence. 

This article aims to guide you through the process of adding a nominee, understanding demat account nomination rules, and providing answers to frequently asked questions.

Who is a Nominee?

A nominee is an individual designated to receive the assets of a demat account holder in case of his or her demise. The nominee acts as a custodian and has the authority to manage and transmit the securities held in the demat account. It is crucial to choose a trusted nominee who can efficiently handle and distribute your securities according to your wishes.

What is Nomination in Demat Account?

Nomination refers to the process of appointing a person who will inherit and manage the assets held in a demat account after the account holder's death. This process ensures a smooth transfer of securities and avoids legal complications and delays. 

By nominating someone, you can alleviate concerns about the transfer of assets to your loved ones. Most importantly, your loved ones may not know where you have made your investments. Nomination across all demat accounts prevents assets from being unclaimed in case of an account holder's unforeseen death. 

Importance of Adding a Nominee in Demat Account

Adding a nominee to your demat account provides a crucial safeguard for your investments. In the event of your demise, the nominee can easily transfer the securities to their name, avoiding lengthy legal procedures. This eliminates the need for your beneficiaries to go through the complex and time-consuming probate process, ensuring a seamless transfer of assets to your loved ones.

How Many Nominees Can Be Added to Demat Account?

As per demat account nomination rules, you can nominate up to three individuals in your demat account. These individuals can be your family members, friends, or any person you trust to handle your securities efficiently. 

However, if you wish to nominate more than three individuals, you need to seek guidance from your depository participant. However, it is wise to have at least one nominee to avoid any ambiguity in asset distribution.

Demat Account Nomination Rules

As per SEBI’s instructions, both your demat accounts and mutual fund folios will be frozen if you do not either choose a nominee or opt out of the facility. The deadline for this has been revised, and the latest deadline is 30th June, 2024. 

To ensure a smooth nomination process, it is essential to adhere to the demat account nomination rules. These rules prescribe the necessary guidelines and procedures for adding a nominee to your demat account. It is important to familiarise yourself with these rules to avoid any complications in the future.

Eligibility Criteria for Nominees

When selecting a nominee, it is important to consider the following factors:

• Nominees can be mothers, fathers, siblings, spouses, children, or any other individual.
• Minors may also be nominated, but in that case, their guardian's details must be provided.
• Please note that non-individuals such as Karta of HUF, corporations, or societies cannot be appointed as nominees. Nominees must be real people who are connected to your family or friend circle.

How to Add a Nominee to a Demat Account Online?

Adding a nominee to your demat account has become a hassle-free process with the advent of online platforms.

1. Visit the official NSDL portal at nsdl.co.in.
2. On the homepage, select the 'Nominate Online' option.
3. You will be taken to a new page where you need to enter your DP ID, Client ID, and PAN details.
4. An OTP will be sent to authenticate your information.
5. If you wish to nominate, select 'I wish to Nominate' else select 'Opt-out'.
6. If you choose to nominate, provide complete details of your nominee on the subsequent page.
7. Authenticate the nomination details by ticking the checkbox on the eSign Service Provider's page and submit the OTP.
8. You will be redirected to the Protean eGov page, where you will need to perform an Aadhaar eSign.
9. Once the Aadhaar e-sign is complete, you will receive an OTP.
10. Submit the OTP to complete the process.

You will see the final confirmation on your computer screen once the process is completed successfully.

How to Update/Change Demat Account Nominee?

If you wish to update or change your demat account nominee, you need to fill out the nomination change form provided by your depository participant. To update or change your demat account nominee –

1. Log in to your demat account and navigate to the account settings or profile section.
2. Look for the option to update or change the nominee details.
3. Fill in the necessary information, such as the new nominee's details or the changes required, and submit the request. 
4. The depository participant will verify the information, and upon approval, the updated nominee details will be reflected in your demat account.

Benefits of Adding Nominee in Demat Account

Adding a nominee to your demat account offers several benefits.

• Firstly, it ensures a seamless transfer of securities to your loved ones, avoiding legal complexities and delays.
• Secondly, it provides peace of mind, knowing that your assets will be taken care of in your absence.
• Moreover, it eliminates the need for your beneficiaries to go through the probate process.

By adding a nominee, you can safeguard your investments and ensure their smooth transition to your nominees.