Nomination and its importance

 

Hi readers, hope our previous article on wealth management and the various strategies associated to it was genesis to your financial discipline. This week, we would like to take you through the importance of nomination in any form of investment/saving choices you make.

 As of 2018, the amount of unclaimed deposits in Indian banks and insurance corporations accounts to 34,000 crores INR. And the trend continues to grow north each year. The major factor that contributes to the accumulation of unclaimed money is failure of a nomination or the nominee being unaware of such deposits or investments made.

 I am sure your hard earned money does not deserve to go unclaimed and a simple act of choosing to enter a name in the nomination column would ensure that your loved ones gets the benefit of your investments/savings in the event of an unfortunate departure.

 What is Nomination?

 Nomination in banking/financial terms refer to the process through which an account holder executes his right to appoint a person as the one who is entitled to receive the monetary benefits accrued out of an investment or saving venture in case of death of the investor or the account holder. And this simple and easy step would ensure the very purpose for which the savings/investment was started is served. It is an ideal way to lessen the hardships of the legal heirs in settlement of claims expeditiously in the event of the death of the account holder. A nomination can be typically done either at the time of opening of the account or at any subsequent time during the tenure of the account/investment. There are certain specific nominations forms that you need to complete and submit to the Bank/ Investment for completing the nomination.

 

Who is a Nominee?

 A nominee is a person who is selected as the beneficiary for the savings/investments made by the investor or the account holder in the event of death of the account holder. However, you can have multiple blood related person as a nominee for your various accounts/investments.

 Who can be a Nominee?

 You can nominate any of the below mentioned members of your family.

   

   ·         Spouse

·         Mother

·         Father

·         Son

·         Daughter

·         Brother

·         Sister

Why is nomination critical?

 Nomination enables your loved ones, access to your savings/investments in the occurrence of the eventuality without any hassles and delay at a time when they would be in most need of it.

 Things to remember while nomination

 Do mention the nominee’s name instead of addressing only their relationship with you (Mention the full name, age and address).

 While nominating a minor as a nominee, appoint a person who is a major as a guardian giving his full name, age, address and relationship to the nominee.

 What if you have failed to nominate already.

 You do not have to worry if in case you have failed to do so. You still have the option to add nominations at any time during the tenure of your investment/savings. Please ensure that your nominee’s information are filled up accurately in the nomination form to avoid any later hindrances for the nominee. Also a nomination can be cancelled or changed by the account holder/investor anytime during his life.

 Hope this article was helpful to you in understanding the importance of Nomination in any investment or saving endeavor. We will catch up again with another interesting topic that will help you to make progress in your financial goals. You can also let us know which topic you would want us to write in the comment box below.

 

 

 

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