How to claim a fixed deposit when the holder dies without a nominee or will

NEW DELHI: Discovering that a deceased family member's fixed deposit has no nominee and no will can make an already difficult situation significantly more complicated. But it does not mean the money is lost.Here is the step by stem guide on how to claim it and what happens legallyWhat happens to an FD when the holder dies without a nominee or will?Once the FD holder passes away, the deposit becomes part of their estate, a legal term for all assets and liabilities left behind by a deceased person. The money is no longer treated as an individual bank account but as property that must be distributed among their legal heirs.When there is no nominee, the bank has no authorised recipient on record.

When there is no will, there are no instructions from the deceased on how to distribute the money. In such cases, succession laws determine who inherits it.Under the Hindu Succession Act, which applies to Hindus, Buddhists, Jains, and Sikhs, the spouse and children are the first legal heirs — classified as Class I heirs.If a child of the deceased has also died, their share may pass to their own children, that is, the grandchildren of the deceased.

For Muslims, Christians, and Parsis, different personal laws apply and the distribution formula varies accordingly.A Nominee is not the ownerA common misconception is that a nominee automatically becomes the owner of the FD. In law, this is not correct. A nominee is only a custodian, they receive the money from the bank and hold it in trust for the legal heirs. Final ownership still belongs to the legal heirs as determined by succession law or a court order.

So even when a nominee exists, other heirs can still raise a claim. When there is no nominee, the bank directly looks for legal heirs.How to Claim an FD Without a Will or NomineeStep 1: Inform the bankNotify the bank about the death of the FD holder as soon as possible. The bank will mark the account as a deceased account and it will then continue to earn interest until maturity but no further operations will be permitted. The bank will then guide the family through the claim process.Step 2: Establish legal heirshipThe bank will ask for proof that the claimant is entitled to the money. This typically includes a legal heir certificate or succession certificate, a family tree or municipal records, and the death certificate of the FD holder.For smaller amounts, banks may accept a legal heir certificate issued by local authorities such as a tehsildar or municipal corporation. For larger amounts, a court-issued succession certificate is usually required.Step 3: Submit required documentsClaimants typically need to provide identity proof such as Aadhaar or PAN, address proof, the FD receipt or account details if available, the death certificate, and heirship documents. All legal heirs may be required to sign a joint claim form.Step 4: Sign an indemnity bondBanks generally require legal heirs to sign an indemnity bond before releasing funds. This is a legal undertaking that protects the bank against any future claims on the same deposit.

Without this, most banks will not process the settlement.Step 5: Bank verificationThe bank verifies the authenticity of documents, the identity of legal heirs, and whether any disputes exist among claimants. If there is disagreement among heirs, the bank will not release funds until the matter is legally resolved.Step 6: Settlement or court directionOnce verification is complete, the FD is closed, principal and accrued interest are calculated, and funds are distributed among legal heirs as per agreement or court order.

In cases of dispute, the matter may go to civil court, which can significantly delay the settlement.How long does the process take?The timeline clearly depends on the complexity of the case. Simple cases with clear heirs and complete documents can be resolved in a few days to a few weeks for that matter. Cases involving large amounts, missing documents, or disputes among heirs can take several months or even longer than that.What is succession certificate and why does it matters?For a higher-value deposits, banks often insist on a succession certificate issued by a civil court. This legal document confirms who the rightful heirs are and protects the bank from future disputes. Without it, banks risk releasing funds to the wrong claimant and being further held liable.Even without a will or nominee, fixed deposits do not become inaccessible. They are transferable, but only after legal verification of heirs. The bank's role is not to decide ownership but to ensure the right people are identified, documents are valid, and no legal disputes remain unresolved. The money exists. Accessing it simply requires proving who is legally entitled to it under the inheritance law. The best way to avoid putting your family through this process is to register a nominee for every fixed deposit you hold, it does not transfer ownership but it makes the claim process significantly faster and simpler.