Why Nomination in a Demat Account Is Extremely Important

 

Most investors spend months researching which stock to buy, which mutual fund to invest in, and which strategy to follow.
But hardly anyone asks:

🔹 “Have I added a nominee to my Demat account?”
🔹 “Will my family be able to access my shares if something happens to me?”

This is a much bigger question than choosing a stock.
Let’s understand it in the simplest possible way.

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1. What Is a Nominee?

A nominee is a person legally authorized to receive the securities (shares, mutual funds, ETFs, bonds) in your Demat account after your death.

The nominee acts as the trustee of your investments so that:

✔ Your family does not struggle
✔ Your investments do not get stuck
✔ Legal procedures become smooth
✔ No unnecessary court cases occur

A nominee can be:

• Husband / Wife

• Son / Daughter

• Mother / Father

• Brother / Sister

• Any trusted person (with relationship mentioned)

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2. Why Is Nomination Extremely Important?

Many people delay nomination because they think:

“We’ll do it later.”

But life is unpredictable.
Here’s a small example that explains why nomination matters:

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📌 Story of Tina and Her Husband

Tina and her husband lived a happy life and had multiple investments.
Unfortunately, both met with an accident.

Their relatives wanted to claim the Demat holdings, but:

❌ They had no nominee
❌ They did not know the login details
❌ They needed a Legal Heir Certificate
❌ They needed a Succession Certificate
❌ They needed NOC from other family members

It took them 120–150 days of paperwork, multiple visits to DP offices, and legal fees.

This entire struggle could have been avoided if nomination had been added earlier.

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3. Documents Required for Adding a Nominee

To add a nominee to your Demat account, you typically need:

1. Nominee’s Name
2. Relationship (wife/husband/son/daughter etc.)
3. Nominee's Date of Birth
4. Nominee’s Aadhaar Number / PAN (if asked)
5. Nominee’s Mobile Number
6. Email ID (optional)
7. ID proof copy (Aadhaar/PAN)
8. Guardian details (if nominee is a minor)

Simple, right?

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4. How to Fill Nomination Form in a Demat Account?

The nomination process is now 100% online for most brokers.

Step-by-Step Process

Step 1: Login to your broker account

Zerodha, Groww, Upstox, Angel One, ICICI Direct — anyone.

Step 2: Go to “Profile / Account Details”

Step 3: Select “Nomination” or “Add Nominee”

Step 4: Fill in the details

• Name
• Relationship
• Date of Birth
• Percentage share (if multiple nominees)

Step 5: Upload ID proof

(Usually Aadhaar is enough)

Step 6: e-Sign using Aadhaar OTP

Step 7: Confirm

Your nomination gets submitted instantly.

For CDSL accounts, you may also receive an email/SMS to authorize the nomination.
Just click “Confirm”.

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5. What Happens If You Don’t Add a Nominee?

Your family will have to go through:

❌ Complicated legal process

❌ Succession certificate

❌ NOC from all legal heirs

❌ Affidavit

❌ Newspaper advertisement in some cases

❌ 3–5 months waiting period

And sometimes accounts remain unclaimed for YEARS.

All because one simple step was skipped.

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6. Nominee vs Legal Heir – Important Difference

Feature	Nominee	Legal Heir
Gets temporary rights	✔ Yes	❌ No (requires legal process)
Receives securities immediately	✔ Yes	❌ After legal certificate
Final owner of assets?	✔ Sometimes (if mentioned in will)	✔ Always (as per law)
Easier process	✔ Very easy	❌ Time-consuming

Nominee = Custodian
Legal heir = Actual owner (as per law)

But nomination ensures smooth transfer until legal settlement happens.

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7. FAQs

Q1. Is nomination mandatory?

Yes. SEBI has made nomination mandatory for all Demat and trading accounts.

Q2. Can I have multiple nominees?

Yes — you can assign percentage shares (e.g., 50%–50%).

Q3. Can I change my nominee later?

Yes. You can modify nominees anytime by filling a nomination modification form online.

Q4. Is there a charge for adding a nominee?

Most brokers allow it free of cost. Some may charge ₹5–₹50.

Q5. Do I need a nominee for mutual funds?

Yes. Mutual funds also require nomination.
You can add it online through CAMS/KFintech.

Q6. What if nominee is a minor?

Then you need to add a guardian.

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8. Conclusion

Adding a nominee is one of the simplest but most powerful steps to protect your family's financial future.

✔ Takes only 2–3 minutes
✔ Can be done online
✔ Prevents legal complications
✔ Gives peace of mind
✔ Makes your investments safe for your loved ones

If you haven’t added a nominee yet, do it today.
And remind your family members and friends too — it may save them from enormous stress later.