Rules and thresholds in this article are those in force as at 1 October 2026. This is general education, not legal advice.
Key facts. A nomination is a revocable direction to pay one named person at one institution; a will is the only document that can direct your whole estate. For bank deposits, since 1 November 2025 you may nominate up to four persons, simultaneously or successively, and the nominee receives the money as a trustee of the legal heirs — the bank must state this in writing. SCSS is the exception you control: nomination is mandatory at account opening in Form 10, and you choose whether the nominee takes as owner or as trustee. A survivorship clause in a joint account governs who may operate it while both are alive, not who owns the money on death. Where there is no nomination, a bank pays on three documents up to ₹15 lakh for commercial banks and ₹5 lakh for co-operative banks; above that, a succession certificate or legal heir certificate. A post office may pay up to ₹5 lakh on a simplified set, and only if no probate or succession certificate was produced within six months of the death. On PMVVY, closed to new entrants on 31 March 2023, the purchase price is refunded on death during the term and no pension continues. Under the Hindu Succession Act, daughters have been coparceners by birth since 9 September 2005, and the Supreme Court has held those rights can be claimed even where the father died earlier. Framework in force from 1 November 2025; banks were required to implement the RBI’s 2025 Directions by 31 March 2026.
The joint account that surprised a family
Mrs Krishnan, 68, opened a joint savings account with her son Arun in March 2024. Arun paid in half the money. The staff asked if they wanted “Either or Survivor”, and she said yes without asking what it meant. When she died in July 2025, Arun expected the balance to be his.
Arun did not get the balance automatically. Nothing on the form said he would, and nobody at the branch had raised it. The clause Mrs Krishnan signed governs who may operate the account while both holders are alive. Who owns the money after a death is a separate question — answered by the succession law that applies to her, not by her signature.
One date does most of the work in this article: 1 November 2025. From that date, bank deposits follow a new set of RBI Directions, and the change readers notice first is the simple one — you can now name up to four people, not one. Anything written before that date will tell you otherwise. Post-office schemes such as SCSS sit outside these Directions and follow their own rules.
What a nomination actually is — and how it differs from a will
A nomination is a revocable direction to pay: you tell one bank, post office or insurer “pay this person if I die”. It is not a gift and not a transfer, and it can be cancelled at any time. A will is different in kind — it is the only document that can direct your whole estate, including assets held elsewhere.
So a nomination names one person at one institution. It does not say what happens to a flat, a fixed deposit at another bank, or a policy at an insurer. In a joint deposit every depositor must sign a fresh nomination to change one.
Under the 2025 nomination rules you may nominate up to four persons, simultaneously (each with a share, adding to 100) or successively (a priority order). Lockers and safe custody are successively only.
Here is what families get wrong. The bank must tell the nominee, in writing, that they are receiving the money as a trustee of the legal heirs — someone holding it for others, not the owner. That is stated in the Directions themselves, so you do not need a lawyer to tell you it.
Can a will override a nomination? Both ways. Against the bank’s obligation to pay, no — the bank is discharged by paying the registered nominee. But a nomination does not finally dispose of the money. Where a will exists, the bank settles on the probate basis (the court’s confirmation that a will is valid) or letters of administration (the court document giving someone authority to administer an estate with no will) — or, at its discretion, on the will itself without probate, if satisfied the will is genuine and undisputed, taking a bond of indemnity (a written promise to repay the bank if the claim turns out to be wrong) and the heir record. The simplified heir route also requires no will at all: a will on record shuts that door, the commonest reason a claim stalls.
Insurance is different, and this is the biggest error in most Indian nomination articles. Under s.39(7) of the Insurance Act, 1938, as substituted by the Insurance Laws (Amendment) Act, 2015, where you nominate your parents, your spouse or your children, the nominee is beneficially entitled to the proceeds — a real owner, not a trustee. Nominate a friend, a cousin, a stranger, and you are back in the older trustee position. Creditors’ rights survive even under the beneficial regime. Under s.39(2), a will can change an insurance nomination before the insurer is notified; the same is not true of a bank deposit. And it remains a nomination, not a will — revocable, one policy, unable to direct the rest of your estate.
Three words get confused here. Nomination is the revocable direction to pay. Transmission is the mechanics of moving the money after death — forms, ID proof, death certificate. Succession is who legally owns it, by will or by the law of intestacy, meaning dying without a will.
Nomination in SCSS, PMVVY and PM-SYM, scheme by scheme
SCSS. Nomination is mandatory at account opening, in Form 10, for up to four nominees, changeable any time before maturity by a fresh Form 10 with your passbook at the Accounts Office — a post office or an authorised bank branch. Since 2 April 2025 the ₹50 charge for changing it is removed. Our SCSS vs bank FD comparison for seniors covers what the deposit pays; this article is about who gets it.
What makes SCSS unlike a bank account: the Rules give you an explicit choice. You state whether the nominee receives the money as a beneficiary “with absolute and exclusive right of ownership,” or as a trustee for the legal heirs. The Form-1 column is headed Nature of entitlement — Trustee or owner.
Two more small-savings rules matter to a 60-plus couple. On the holder’s death the spouse may continue the account on the same terms if eligible, with interest at the Post Office Savings Account rate until closure. But where spouses held separate accounts, the deceased’s is closed, not continued. And a joint SCSS account is with a spouse only, and the whole deposit is attributable to the first holder. That is the small-savings version of the survivor-clause trap, and readers rarely expect it. The same trap in a bank account, with figures, is in our joint SCSS and 80TTB piece.
Also: SCSS, PPF and NSC are excluded from the RBI’s 2025 Deceased-Customers Directions, so do not carry the bank thresholds across. Where there is no nomination, a post office may pay up to ₹5 lakh on a simplified set — claim form (Form 11), death certificate, original passbook, affidavit Form 13, disclaimer Form 14, bond Form 15. Only if no probate, letters of administration or succession certificate was produced within six months of the death. Above ₹5 lakh, payment is only against a Succession Certificate from court.
PMVVY — existing policyholders only. LIC’s FAQ confirms it was on sale only up to 31 March 2023. If you are reading this thinking of buying PMVVY, you cannot. The part that surprises people: on death during the 10-year term, the purchase price is refunded to the beneficiary and no pension continues — the policy document’s own wording. Families routinely assume the pension carries on for the spouse. It does not. (For what a policy is worth while it runs, see loan against PMVVY and PPF.)
Nomination runs under s.39, so the s.39(7) point above applies. LIC’s conditions require a written endorsement by the Life Assured to change it, and a nomination is not stamped. Death must be intimated to the servicing office within 90 days; LIC may condone a genuine delay on merit. LIC publishes the framework but no public circular on the change procedure — the substance is not in doubt, but which form goes where is not published. Confirm it at your servicing branch.
PM-SYM. Nomination is available for one person. The trap: if the subscriber dies after regular contributions, the spouse may join and continue and take ₹3,000 a month — or, at the spouse’s option, the contribution returns to the nominee with savings-bank interest. If the spouse continues, the nominee receives nothing at all. After the pension starts, the 50% family pension goes to the spouse. Whether you are eligible at all is a separate calculation, in our PM-SYM eligibility walkthrough.
Joint accounts and the survivor-clause trap
The RBI’s 2025 Directions treat “either or survivor”, “anyone or survivor”, “former or survivor” and “latter or survivor” as survivorship clauses — and each governs operation, nothing else.
| Clause | What it governs while both are alive |
|---|---|
| Either or Survivor | Either holder may operate alone |
| Former or Survivor | Only the first-named holder may operate |
| Latter or Survivor | Only the second-named holder may operate |
| Anyone or Survivor | Either or both may operate |
| Jointly (no survivorship clause) | Both signatures required for withdrawals |
Does a survivorship clause decide who owns the money when an account holder dies? No. “Either or Survivor” and its variants govern who may operate the account while both holders are alive. Ownership of the money on death is a separate question, answered by the succession law that applies to the deceased — and a joint holder is a legal heir by succession, not a nominee.
Not one of these clauses settles ownership on death. The survivor receives as trustee for the legal heirs, the same limit as a nominee. The case needing the full heir route is “Jointly”: in its circular of 12 July 2005 the RBI said the right to deposit proceeds does not automatically devolve — pass on by succession rather than by survivorship — to the survivor unless there is a survivorship clause. And where a nomination is registered on a joint account, the nominee’s right arises only after the death of all the depositors. The labels are the RBI’s, but the mandate and the document checklist differ bank to bank. Ask your own bank, in writing.
When there is no nomination: transmission vs legal heir certificate
Route A — nomination or survivorship clause. The bank pays on three documents and no more: claim form (Annex I-A), death certificate, and an Officially Valid Document — a passport, PAN card or Aadhaar, what the RBI counts as proof of identity. No succession certificate, no probate, no indemnity bond, at any amount — a bank demanding more on a nominated claim is not following the Directions. Each Annex is a form the RBI has prescribed for that route.
Route B — no nomination, no survivorship clause. The simplified procedure requires all of: no nomination; no will left behind; no contesting claim; no court order known to the bank; and an amount under the threshold — ₹15 lakh for commercial banks, ₹5 lakh for co-operative banks, with banks permitted to fix a higher figure. Up to that: claim form (Annex I-B), death certificate, ID of the claimants, bond of indemnity (Annex I-C), letter of disclaimer (Annex I-D) from the legal heirs not claiming, and a legal heir certificate — or an Annex I-E declaration by someone independent and well known to the family. Above it: a Succession Certificate from the District Court (Indian Succession Act, 1925, ss.371–372), or a legal heir certificate, or an Annex I-E affidavit sworn before a notary, a judicial magistrate or a Judge.
Which officer issues a legal heir certificate, and what it costs, varies by state — Tehsildar, Revenue Mandal Officer or the district authority. Ask your state’s revenue department, not a bank and not this article. It is a revenue record of who all the heirs are, not a court adjudication of title, and not interchangeable with a succession certificate, the only document conferring title to debts and securities. The Directions require settlement within 15 calendar days of receipt of all required documents; in practice timelines vary by bank and state, and nobody should promise you a date.
Who the law says inherits
There is no single Indian rule. Which one applies depends on your religion, and sometimes on your family’s custom.
- Hindu, Buddhist, Jain or Sikh — the Hindu Succession Act, 1956
- Muslim — the Muslim Personal Law (Shariat) Application Act, 1937, which the Indian Succession Act expressly excludes
Christians, Parsis and others fall under the Indian Succession Act, 1925; Scheduled Tribes are outside the Hindu Succession Act unless the central government says otherwise. A family’s own long-standing custom can still override the default — two family systems in Kerala and Tamil Nadu are written out of the Act by name.
The Act sorts heirs into two tiers. Class I is the close family: son, daughter, wife, mother, the children of a child who died before the deceased, and the widow of a son who died before him. If any Class I heir is alive, nobody in Class II receives anything. Class II is everyone further out — father, siblings, grandparents, nieces, nephews — in a fixed order, and only if there is no Class I heir at all. Class I heirs take simultaneously, to the exclusion of all others.
With no heirs and no will, the property passes to the Government because there is no one else to take it (s.29). The eldest son is not automatically the owner: nothing gives any son a larger share, and each surviving son and daughter takes one share (s.10, Rule 2), as do the widow and the mother.
Under the ISA a widow’s share depends on who else inherits: one-third with children, one-half with other relatives but none, the whole estate with no relatives at all (s.33). One small-estate trap is worth knowing — s.33A: where there are no lineal descendants and the net value is ₹5,000 or less, she takes all of it; above ₹5,000, she takes ₹5,000 with a charge on the estate at 4% a year until paid, plus her s.33 share of the residue. Children take equally, and where the family is uneven by depth the estate is divided per stirpes — each branch stepping into its parent’s place, taking the share that parent would have had (s.40).
The daughter is a coparcener. This is where families most often accept the wrong answer, and the words are worth slowing down for. A coparcener is a member of the family that shares the ancestral property pool — not a fixed owner, but someone whose share grows and shrinks as the family stands. The coparcenary is that shared pool itself. A Joint Hindu family is the undivided ancestral family; Mitakshara is the default Hindu family-law system, unless a family’s own custom says otherwise.
Under s.6 of the HSA, as substituted by the Hindu Succession (Amendment) Act, 2005, in force 9 September 2005, a daughter of a coparcener becomes a coparcener by birth, in the same manner as a son. The Supreme Court has since read that amendment as applying retrospectively — in Vineeta Sharma v Rakesh Sharma (2020) 9 SCC 1, a three-judge bench held that because coparcenary rights are rights of birth, they cannot be conferred at a moment in time, so a daughter may claim her share even where the father died before 2005, overruling the earlier cases that said otherwise. The 20 December 2004 cut-off still saves a disposition, partition or testamentary gift already made by then. And under s.6(3), where a coparcener dies after the amendment, their interest passes on by succession rather than by survivorship. So “the eldest son takes everything when the mother dies” has not been right since 2005. If your father died long ago, this is worth a lawyer’s opinion rather than an assumption in either direction.
One family, end to end
Mr and Mrs Iyer, both 70, Bengaluru. A joint savings account with “Either or Survivor”; an SCSS account in Mrs Iyer’s name with a Form 10 nomination naming her son; a PMVVY policy from 2019. Mrs Iyer dies in August 2025.
Savings account. Survivorship clause present, so Route A. Her son produces the claim form, death certificate and ID. The bank pays him — as trustee for the legal heirs, which he must be told in writing. The bank is discharged, and who is entitled to that money becomes a family matter, not a banking one. Note that under the Hindu Succession Act a surviving husband is not an heir in his own right: on a wife’s death her children inherit, and where she left no children, her parents are the Class I heirs — with neither do you reach Class II. His route is a will or a maintenance claim under s.30(2). Get a lawyer’s view on your own facts.
SCSS. Nomination recorded, and Mrs Iyer elected owner for her son. He files the claim form with the death certificate and is paid in the stated proportion. Clean, because she chose the form when the account opened.
PMVVY. A legacy policy. On death during the term the purchase price is refunded, and no pension continues for the husband. Both had assumed otherwise for six years. Two of the three were fine because of paperwork written years earlier. The third was assumed, not documented.
What it costs, and what can go wrong
Stamp duty and registration on a will — stamp duty is the state tax charged on a document, registration the fee for recording it. Both are set by each state and the rates change, so we have verified one state properly rather than five loosely. In Karnataka, stamp duty on a will deed is nil and registration is ₹200; registering a sealed cover is ₹1,000. Other states differ and we have not verified them. Take a draft to your sub-registrar and ask for the fee in writing before you sign anything. Notarisation fees are set by the state and the notary; attorney’s fees are market.
Delay is the real cost. Fifteen calendar days is the norm; weeks and months is what many families experience. A will on record shuts the quick door, and contesting heirs shut it too.
Family conflict is the cost nobody budgets for. Simultaneous nomination splits payment, not ownership — each of four nominees then holds as trustee for all the legal heirs, which can turn one dispute into four. And a nomination cannot express conditions: “my wife first, then her daughters, then my son’s children” is not something the form can say.
The limit of all this: a nomination covers one institution’s payment, does not reach assets in another, does not bind a litigating heir, and is not a substitute for a will.
Your checklist — this month
- Ask each bank and post office, in writing, for the current nomination form, what happens on death in that account, and what documents they will require.
- Register or update the nomination on every deposit account — bank and post office alike. It is revocable at will, by a fresh form, any time while the deposit is open. For SCSS, PPF and NSC the ₹50 fee for changing it was removed on 2 April 2025, so that change is free.
- Write on one page what you want to happen, then check whether a nomination can deliver it. If it cannot, that is information — not a reason to delay.
- For every SCSS, PPF or NSC account, check the trustee-or-owner choice is filled as you intended. Most people never look at that field again.
- If you hold a PMVVY policy, confirm the beneficiary with LIC, and tell your family plainly that the pension stops on death.
- For every account, write down one sheet: the account number, the survivor clause as it reads, the nominee if any, and who is authorised to operate it. Give a copy to your children. This is the one hour of work that decides whether the bank pays in weeks or in months.
- If there is no nomination anywhere, start the heir-route conversation — legal heir certificate from your state’s revenue authority, or a succession certificate if the amount is large. Know which officer issues it.
- If any will exists, or one is being written, tell the bank before filing a claim.
Key takeaways
- For a bank deposit, the nominee or survivor receives as trustee for the legal heirs. SCSS is the exception you control — at account opening you choose owner or trustee.
- A joint account is not a nomination. The survivor clause governs operation, not ownership on death.
- Daughters have been coparceners by birth since 9 September 2005, and the Supreme Court has held those rights can be claimed even where the father died earlier.
- PMVVY: on death during the term, the purchase price is refunded and no pension continues.
More from the senior savings and pension schemes cluster: SCSS interest tax and the TDS threshold, senior citizen banking benefits, and 80TTA vs 80TTB.
Where to get professional help
This is general education, not legal advice. For anything beyond a nomination form: a lawyer experienced in succession and family law can tell you how the law applies to your religion, your state and your family; a chartered accountant can advise on the tax side; your bank’s legal or grievance department can confirm its checklist in writing. Facts like a second marriage, a stepchild, an NRI heir or a disputed will are exactly where general reading runs out.
Risks and limitations. The framework described here is that in force from 1 November 2025; banks were required to implement the RBI’s 2025 Deceased-Customers Directions by 31 March 2026. Probate is no longer a mandatory gateway. Section 213 of the Indian Succession Act — which made probate compulsory — was omitted by the Repealing and Amending Act, 2025 (Act 37 of 2025, assented 20 December 2025). The Act carries no commencement notification, so under s.13 of the General Clauses Act, 1897 it took effect on the day it received assent, and no later notification has been issued. Probate remains one route of proof, not the only one, and the Act’s provisions on letters of administration and succession certificates are untouched. Bank practices, thresholds and timelines vary and can be changed by individual banks. Costs are state-specific and were verified only for Karnataka. Tax treatment of amounts received by nominees is not addressed here — take professional advice on it.
Source note: RBI (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025 — rbi.org.in — ¶¶6(b), 7(a), 7(h), 8, 9, 10, 11(a), 31; RBI circular of 12 July 2005; Banking Companies (Nomination) Rules, 2025 (G.S.R. 790(E)), with s.45ZA of the Banking Regulation Act, 1949; Government Savings Promotion (General) Rules, 2018 — nsiindia.gov.in — r.14(1)(c), r.15(6); SCSS Rules, 2019 (G.S.R. 214(E), 2 April 2025), ¶¶3(4), 3(6), 7(2); PMVVY Policy Document, Part C condition 2, and LIC’s PMVVY FAQ; Ministry of Labour & Employment PM-SYM FAQ of 18 January 2022; Hindu Succession Act, 1956, ss.2, 6, 10, 29, 30(2); Hindu Succession (Amendment) Act, 2005; Indian Succession Act, 1925, ss.33, 33A, 40, ss.371–372; Repealing and Amending Act, 2025 (Act 37 of 2025); General Clauses Act, 1897, s.13; Vineeta Sharma v Rakesh Sharma (2020) 9 SCC 1; Karnataka state fee chart.
Sources: RBI Deceased Customers Directions, 2025; RBI circular of 12 July 2005 on joint deposit accounts; NSI Government Savings Rules, 2018 and SCSS Rules, 2019; LIC PMVVY policy document and FAQ; Ministry of Labour & Employment PM-SYM FAQ of 18 January 2022; bare Act texts for the Hindu Succession Act, 1956, the Indian Succession Act, 1925, the Repealing and Amending Act, 2025 and the General Clauses Act, 1897; Vineeta Sharma v Rakesh Sharma (2020) 9 SCC 1; Karnataka state fee chart. Retrieved 1 October 2026. For education only; not legal advice.
