Lesson 1 of 3 · 6 min
The receiver is not the owner
A nominee is who the institution pays. Who owns the money is decided by a will, or by succession law — and the gap between those two facts splits families.
Every time you open a bank account, a demat account or a mutual fund folio, a form asks for a nominee. Most people believe this decides who inherits the money. It does not — and that one misunderstanding has split more Indian families than almost any other piece of paperwork.
Myth
“Whoever I name as nominee gets to keep the money.”
False
A nominee collects the asset and holds it on behalf of the legal heirs. Who owns it is decided by a valid will, or by succession law if there is none. Courts, including the Supreme Court, have said this repeatedly for bank deposits and for shares. Life insurance has one special rule — that is the next lesson.
But it is my account — surely I decide?
KabirTara
Kabirasking
Wait. If I put my sister down as nominee, isn’t the money just hers when I die? It is my account. I picked her.
Taraexplaining
You picked who the bank hands it to. You did not pick who owns it. Those are two different questions, and the form only asks you the first one.
Kabirasking
So what decides the second one?
Taraexplaining
Your will, if you wrote one. If you did not, succession law does — and it has never heard of your nomination form.
Kabirasking
That feels like a trap. Why does the form not say so?
Taraexplaining
Because it was never solving your family’s problem. It was solving the bank’s: one person it can legally pay, so it stays out of the argument. Writing a will is what settles the ownership.
Match them up
Four words this lesson turns on
Pick a term, then pick what it actually means.
Pick a term on the left.
Quick check
Ravi, 24, names his flatmate as nominee on his bank account and dies without a will. Who ends up owning the money?
Sort it
1 / 5
Receiver or owner? Swipe each one.
Nominee on a bank account
Check yourself
1 / 3
Kabir asks
You name your flatmate as nominee on your bank account. You die without a will. What does the bank do?
Done reading?
Saved in this browser.