Nominee for Your Bank Deposit Account
Let there be no confusion
Abankisaplacewheretheylendyouanumbrellainfairweatherandaskforitbackwhenit begins to rain. ~ Robert Frost
Common consumers, especially those with basic banking needs, continue to remain ignorant or confused about several typical banking terminologies. If the term also has another meaning in general English, it becomes foreign to some with regard to its usage in banks. One such term is ‘nominee', especially because it is more often used or talked about for filing candidature for some elections. Here, we will look at what ‘nominee' means in banking terms, how it is different from ‘legal heir', and whose claim is greater should a conflict arise.
Most Confusing: Nominee versus Legal Heir of Fixed Deposits
Imagine a scenario where Mr Verma deposits a sizeable sum of money in a fixed deposit and makes his wife the nominee. In case Mr Verma passes away due to some unfortunate incident/accident, the fixed amount should go to the nominee, who in this case is his wife. Everything seems to be in order. However, what if a conflict occurs? What if someone from Mr Verma’s family comes forward claiming that they are the deceased person’s legal heirs and that they are entitled to the money given to the nominee? The matter goes up in front of a judge and the judge rules that the money, assuming the claimant is indeed the depositor’s legal heir, goes to the legal heir. How can this happen?
It may come as a surprise to you but a nominee, in fact, is not the same thing as a legal heir and the claim of a legal heir supersedes that of the nominee.