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Updated on: 22 Dec 2023 | 10 mins read
Fixed deposit is a popular form of investment for risk-averse investors who want to avoid market-linked investment instruments due to their fixed returns. Investors with a risk appetite also include fixed deposits in their investment portfolio for diversification and to add stability to their returns.
The death of a family member or relative is an unfortunate one which leaves the family in emotional turmoil. However, controlling finances in such a situation is equally important. Here, we will discuss how to claim a fixed deposit after the account holder's death.
In the case of an FD maturity claim after the account holder’s death, the process depends on whether it is an individual or a joint account. The sections below delve deeper into how to claim a fixed deposit after death.
Under a joint account, the account holders can decide to continue the account till maturity, depending on the type of account. Joint accounts usually have clauses such as ‘either or survivor’, ‘anyone or survivor ‘, ‘former or survivor’ and ‘latter or survivor’ relating to the access granted to the joint depositors. For example, under ‘either or survivor’, both account holders can operate the account.
Additionally if the primary account holder passes away during the term of the deposit scheme, the nominee or legal heir can choose to continue the scheme till maturity. In this case, the fixed deposit scheme runs until maturity, and then the claimant can make a claim.
If all the account holders die, the nominee can continue the account till maturity and then receive the claim. The legal heir can collect the deposit after maturity if no nominee is appointed.
Below, attached is a table that mentions how to claim a joint FD account if the primary account holder passes away:
| Type of joint account | Meaning |
|---|---|
| Either or Survivor | There are two account holders; the maturity amount is paid to either of them; if one of them dies, the survivor gets the amount |
| Anyone or Survivor | There are more than two account holders; all have access to the account. If one or more holders die, the deposit is paid to the survivor/s |
| Former or Survivor | There are two account holders; only the primary holder manages the account. If the primary holder dies, the secondary holder can access the funds |
| Latter or Survivor | There are two account holders; only the secondary holder operates the account. If the secondary holder dies, the primary holder can access the funds |
If the primary account holder passes away during the term of the deposit scheme, the nominee or legal heir can choose to continue the scheme till maturity. In this case, the fixed deposit scheme runs until maturity, and then the claimant can make a claim.
In the case of an FD maturity claim after the account holder’s death, the process depends on whether it is an individual account or a joint account.
Individual account
If the account is held in an individual’s name, there are two scenarios:
Joint accounts
Under a joint account, the account holders can decide to continue the account till maturity, depending on the type of account. If all the account holders die, the nominee can continue the account till maturity and then receive the claim. The legal heir can collect the deposit after maturity if no nominee is appointed.
If the primary account holder dies, the claimant can claim the balance prematurely, i.e., before the term ends, in the following manner:
Individual account
Under this type of account, the nominee or the legal heir can request the Bank / financial institution to close the account upon the account holder’s death. They can fill out a claim form and submit it with the relevant documents. The financial institution will then process the request and release the amount to the claimant.
Joint account
In the case of joint accounts:
The process of claiming a fixed deposit after the death of the account holder is more straightforward if a nominee has been added. If the account holder dies, the nominee or legal heir can withdraw the FD account balance or continue the account until the stipulated maturity date. Knowing how to claim a fixed deposit after the death of the account holder is vital so that the money can be accessed without delays and inconvenience. You must educate your family members about the claim process so that, in your absence, they can access the funds easily.
What documents are required to claim FD after the account holder’s death?
To withdraw the FD, the nominee must fill out the claim form and submit their identity proof and the account holder’s death certificate.
When is the succession certificate required for an FD claim, and why?
In the case of the account holder’s death, the fixed deposit account balance is payable to the nominee that the account holder specifies when opening the fixed deposit account. However, if no nominee has been named, the legal heir of the deceased account holder can claim the deposit. In such a scenario, the legal heir must submit a succession certificate to the financial institution to justify their claim. A succession certificate proves the identity of the claimant. The financial institution needs the succession certificate to establish the legality of the claim.
How many nominees can be appointed in a fixed deposit account?
You can appoint only one nominee per FD. However, you can appoint different nominees for different FDs.
Can the account holder withdraw the FD before the completion of the tenure?
Yes, the account holder can withdraw the FD prematurely upto Rs 1 crore. However, a penalty is levied in such cases ( the penalty amount varies from one bank to another), which reduces the effective interest income.
Does the bank pay the deposit automatically after the account holder’s death?
No, the bank will not pay the deposit amount automatically after the account holder’s death. The claimant has to inform the bank of the account holder’s death. After that, they can continue the fixed deposit account until the specified tenure or request to close it prematurely and withdraw the amount immediately.
Can the nominee continue FD after the death of the account holder?
Yes, the nominee can continue FD after the account holder's death.
How is the deceased FD account settlement disbursed?
The claimant must submit the account holder’s account information and required documents to receive the settlement funds.
