Table of content

Add a Nominee in Your Demat Account

Table of content

How to Add Nominee in Demat Account

Having a demat account eliminates the risk of loss or damage to physical share certificates, thereby removing the hassle of keeping them safe. The shares can be easily transferred and traded, and you can view and conveniently keep a track of the shares you own.

Adding a nominee to your demat account is an important step to ensure that your shares and securities will be transferred to the person you choose in the case of your unexpected death or incapacitation. This article will show you how to add a nominee in your demat account.

What is a demat account?

A demat account is used to hold shares and securities in an electronic format, rather than in physical form. The term "demat" is short for "dematerialisation," which refers to the process of converting physical shares and securities into electronic form.

Once the account is set up, you can deposit securities of various forms into it, such as stocks, mutual funds, bonds, ETFs, etc. You can even use your demat account to trade in derivatives and participate in initial public offerings (IPOs) and follow-on public offerings (FPOs).

Read Also: Benefits Of Opening Demat Account With m.Stock

Who Is The Nominee?

Demat (dematerialized) account, which is used to hold shares and securities electronically, "the nominee" in a demat account refers to a person designated by the account holder to receive the securities held in the demat account in the event of the account holder's death. The nominee facilitates the transfer of assets without the need for legal succession or probate proceedings. Adding a demat account nominee is crucial as it simplifies the process of transferring the account's holdings to the beneficiary, ensuring that the securities are transferred according to the account holder's wishes with minimal legal hassle.

Eligibility Criteria To Be A Nominee For A DEMAT Account Holder

To understand how to add nominee in demat account, first we have to look at the eligibility. To be eligible for a Demat (Dematerialized) account in India, which is essential for holding securities like stocks and bonds in an electronic form, certain criteria must be met. Here are the updated eligibility requirements for becoming a nominee of a Demat account holder according to the regulations and norms in India:

  • Age Requirement:

    The nominee must be a major, i.e., 18 years of age or older. However, a minor can also be nominated, but a guardian must be appointed until the minor reaches the age of majority.
  • Citizenship:

    The nominee should be an Indian citizen. This is crucial to ensure that the nominee can legally own the securities after they are transferred.
  • Relation to the Account Holder:

    There are no restrictions based on the relationship to the account holder. A nominee can be a family member, friend, or any other person whom the account holder trusts.
  • Number of Nominees:

    A Demat account holder can nominate up to three individuals for a single account. Each nominee can be assigned a specific percentage share in the account, which must total 100%.
  • KYC Documentation:

    The nominee must comply with Know Your Customer (KYC) norms, similar to the account holder. This includes providing proof of identity (POI) and proof of address (POA) documents, such as a PAN card, Aadhar card, or passport.
  • Consent:

    It is important for the nominee to provide consent for the nomination, acknowledging their awareness and acceptance of being nominated as the rightful claimant of the securities in the event of the account holder’s death.
  • Multiple Accounts:

    A nominee in one Demat account can be nominated across multiple accounts, regardless of whether these accounts are held at the same or different depository participants.
  • Change or Cancellation:

    The account holder has the flexibility to change or cancel the nomination at any time. To change a nominee, the account holder must fill out a fresh nomination form.

How to add a nominee in a demat account?

Adding a nominee to your demat account is a hassle-free process and can be done through online or offline modes. If you have a joint demat account then all the account holders will need to sign the online/offline nomination form. Also, carefully consider whom you choose as your nominee to avoid complications later on of having to switch nominee name and details. Download the Nominee form (Annexure A) The following individuals can be chosen as nominees:

  • Family members
  • Spouse or partner
  • Friends
  • Minors with details of the guardian till they reach the age of 18

You cannot choose non-individuals such as a corporation, or society, or limited firm. Nominees holding a Power of Attorney cannot be added either.

How to add a nominee in a demat account online?

Here is a detailed breakdown of the online process for nominating individuals to your Demat account via your trading platform, which can be accessed either through a web portal or a mobile app:

  • Accessing the Nomination Section

    • Start by logging into your trading account. Navigate to the ‘My Profile’ section, which is commonly found in the user settings or account management areas of the platform.
  • Adding Nominees

    • Within the ‘My Profile’ section, locate and click on the option for managing nominations. Here, you can initiate the process to add a nominee.
    • You are allowed to add up to three nominees per account. This flexibility helps in distributing your securities according to your preference in the unfortunate event of your demise.
  • Entering Nominee Details

    • For each nominee, you will need to provide several key pieces of information:
    • Name: Enter the full legal name of the nominee as it appears on their government-issued documents.
    • Date of Birth: This is required to verify the age of the nominee, especially to confirm if they are a minor or an adult.
    • PAN (Permanent Account Number): A critical identifier for tax purposes and to comply with financial regulations.
    • Relationship with the Account Holder: Specifying the relationship helps in understanding the connection and the rationale behind the nomination.
    • Percentage Allocation: Define what percentage of the holdings each nominee is entitled to receive. The total allocation across all nominees must sum up to 100%.
  • Submission and Verification

    • After filling out all the necessary details for each nominee, review the information to ensure accuracy.
    • Submit the nomination request. Post submission, you will be prompted to verify and authenticate the transaction.
  • E-signing the Request Form

    • To complete the nomination process, you will be required to e-sign the request form. This is typically done using an Aadhaar-linked OTP (One Time Password) sent to your registered mobile number or email. E-signing legally validates the nomination, ensuring that it is secure and recognized under the law.
  • Confirmation

    • Upon successful submission and verification, you will receive a confirmation via email or SMS. This confirmation indicates that the nomination has been successfully registered and is now active.

How to add a nominee in a demat account offline?

  • Obtain the nominee registration form from the depository participant (DP) with whom you have opened your demat account.
  • Fill out the form with the nominee's personal details, such as name, address, and date of birth. You will also need to provide your demat account number.
  • Submit the completed form along with the required documents, such as ID and address proof, to the DP.
  • Once the DP verifies the nominee's details, they will update the nominee information on the demat account.

Steps to Switch the Nominee for Your DEMAT Account

Pay Fees: Pay a fee of Rs. 20 plus 18% GST.
Submit Required Forms: Provide hard copies of the nomination form and the account modification form.

Benefits of appointing a nominee

Adding a nomination for demat account is a crucial aspect of financial planning and asset management. Here are some key benefits, detailed in bullet points, that underscore the importance of having a nominee:

  • Secure Wealth Transfer:

    • Guaranteed Accessibility: Ensures that your assets, including mutual funds, shares, and bonds, are readily accessible to your heirs upon your demise.
    • Immediate Transfer: Facilitates the direct transfer of your financial assets to the nominee, bypassing the often lengthy probate processes.
    • Continuity of Investment: Maintains the continuity of your investments, allowing your heirs to benefit from ongoing market activities without interruption.
  • Prevent Legal Disputes

    • Clear Succession: Clearly defines the successor to your assets, which can deter disputes among potential heirs and family members.
    • Legal Clarity: Provides legal clarity and certainty about the transfer of your assets, reducing the likelihood of contentious legal battles.
    • Harmonious Family Relations: Helps maintain harmonious family relationships by having clear, documented instructions on asset distribution.
  • Simplify Legal Processes

    • Reduction of Formalities: Substantially reduces the number of formalities that heirs would otherwise need to fulfill to claim the assets.
    • Streamlined Documentation: Simplifies the documentation process needed for asset transfer, as the nominee is pre-verified and documented.
    • Expedited Asset Release: Accelerates the process of releasing assets to heirs, as the legal groundwork is already laid via the nomination.
  • Estate Planning

    • Strategic Asset Allocation: Allows you to strategically plan and allocate your assets among your heirs according to your wishes.
    • Future Security: Secures the financial future of your family by ensuring that assets are transferred to intended beneficiaries without legal hurdles.
    • Wealth Management Continuity: Helps in the continuity of wealth management practices, ensuring that your estate planning goals are met even after your passing.

Read Also: How to Change Your Name in Demat Account?

Things To Keep In Mind When Adding A Nominee To Your Demat Account

  • Account Ownership: Ensure you are either a joint or single account holder. Corporate bodies and power of attorney holders do not qualify.
  • Nomination of Minors: Minors can be nominated but require a guardian's name and address.
  • Rights and Changes: You can update or remove nominees anytime through the CDSL system or your broker’s website.


As you can see, adding a nominee in your demat account is a wise and beneficial decision. The nominee becomes the rightful heir for the account holder’s securities in the demat account. It is important to note that the nominee does not have any ownership rights to the securities held in the account until the stocks are directly transferred to them in the unfortunate demise of the account holder.

Frequently Asked Questions

While it is not necessary, it is highly recommended to add a nominee in your demat account. This ensures that the securities in the account will be transferred smoothly and swiftly to the nominee in the unfortunate event of the account holder's death or incapacitation. In accordance with SEBI rules, the primary account holder needs to declare whether they wish to add a nominee or not. If yes, then the requisite nominee details such as name, age, relationship, etc. need to be added.

The rules state that you can add up to 3 nominees for each demat account. You also get the opportunity to distribute the holdings by percentage to avoid disputes and complications later on. For example, split 50-50 between 2 nominees or a different appropriation of your choosing. Naturally, in the case of a single nominee all your securities are transferred to them.

A nominee for a demat account is a person designated by the account holder to receive the securities held in the account in the event of the account holder's death. The nominee can be anyone, such as a family member, friend, or any other individual. To appoint a minor as nominee, the account holder needs to provide the details of the guardian as well. Non-individuals, associations, or corporations cannot be appointed as a nominee.

The primary purpose of adding a nominee is to ease the share transfer process. By appointing one or more nominees (and declaring the percentage distribution) shareholders can ensure their nominees get the securities upon the shareholder’s unfortunate demise. In the absence of a nominee in a demat account, the process of transferring securities can become more complicated and time-consuming. In certain cases, a legal process may be required to confirm the status of the heir and establish the legal ownership of the securities held in the account.

No, it is not mandatory to appoint a nominee in a demat account. However, as per SEBI rules, it is mandatory to declare if you do not wish to add a nominee by filling the requisite form. Download the DECLARATION FORM FOR OPTING OUT OF NOMINATION - ANNEXURE B Not having a nominee can make the transfer of ownership of securities rather complicated, in case of the account holder’s death. Adding a nominee ensures that the rightful heirs get their due with fewer hassles and complications.

No, a nominee is the person designated by the account holder to receive the securities held in the demat account in case of the account holder's death. The nominee has no ownership rights before this event. In case of the account holder's death, due process is followed and the shares can be transferred to the nominee or other legal heirs as per the account holder's will and/or declaration.

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