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Factors to consider when choosing a nominee for your bank account
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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No matter your age, income, or number of dependents, it’s crucial for you to add nominees to all your financial and investment products. This also includes your offline or online bank savings accounts. It is important to add a nominee either at the time of the bank account opening process or at a later date without fail. This is to ensure that access to your funds is given to the right person of your choice at the right time without any legal or procedural issues. And here are some factors you should consider when choosing a nominee for your savings bank account:
1. Choosing the right person
You can choose only one person as the nominee for your bank account and usually, people tend to choose a family member – spouse, children, parents, etc. When deciding who your nominee should be, it’s important to consider your levels of trust and communication with them so that they utilise your funds in a way that you wish. For instance, your spouse who knows that you are saving money in a particular bank account for your children’s higher education in the future. It is also important that the nominee has enough financial awareness that they know how to access the funds when the time comes and do not have to depend on another relative or person for the same.
2. Communicating clearly
Another thing to ensure is clear communication with all parties relevant. It’s not only essential to inform the person you are selecting as savings bank account nominee but also any other person to whom this may be relevant.
3. Reviewing your nominee
A lot of events over time can require you to change or make adjustments to your previously selected nominee. For instance, if you had chosen your spouse as your nominee but now you want to keep your child as the nominee or if you had added your mother as your nominee, but she passed away, then it’s important for you to update your nominee. The good thing is that you can change or edit your nominee information multiple times without any restriction. Regularly reviewing your nominee as you go over other personal finance information is prudent.
4. Checking requirements
When you are in the middle of the bank account opening process and are going through details such as the documents required for the bank account, you should also check the requirements for the nominee. For instance, if you want to nominate your child who is still a minor, you may have to appoint a guardian who will have control over the account until your child turns 18.
Choosing a nominee for bank accounts may often be the last thing on a person’s mind when taking care of their finances, but it is crucial to ensure that your hard-earned money goes into the hands of the person you want when the time comes. So, don’t delay this any further and add nominees to all your bank account today!
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