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).

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?

The online process is almost instantaneous and can be done by accessing the ‘My Profile’ section of your trading platform via the web portal or through the mobile app. Here, you can add and enter the nominee’s personal details such as name, date of birth, PAN, relationship with you, and the percentage allocation. Up to three nominees can be added here. Upon submission of the request you will be required to e-sign the request form.

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.

Benefits of appointing a nominee

When you add a nominee, you are specifying a person who will be the legal custodian of your demat account and will have the right to claim the shares and securities in the event of your death or incapacitation. This ensures that the process of transferring ownership of the shares and securities will be smooth and less time-consuming for your nominee.

Additionally, adding a nominee can also help in avoiding legal disputes and delays in transferring the shares and securities to your legal heirs in case of your death.

It is possible to add or change the nominee at any time by providing the necessary documents to your depository participant and updating the account details.

Conclusion

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.