Article

Settling Bank Deposit Claims of the Deceased
September 05 , 2013

When a person dies his nominees or legal heirs are eligible to receive balances in his bank accounts. This article will take you through common rules on settlement of deceased claims, procedures and documents required.

Deceased claim settlement rules

Ease claim settlement of a dead deposit holder depends on 2 facts- value of deposit or balance in account and mode of operation of account.

In the table below we have summarized who can be beneficiaries under different circumstances

Mode of operation

Beneficiary if nomination exists

Beneficiary in absence of nomination

Single depositor

Nominee

Legal heirs

Joint account operated jointly

One depositor dies

– Legal heirs of deceased + survivors

One depositor dies

– Legal heirs of deceased + survivors

All depositors die

– Nominee

All depositors die

– Legal heirs of all depositors

Joint account in either or survivor mode

One depositor dies

– Survivor

One depositor dies

– Survivor

Both depositors die

– Nominee

Both depositors die

– Legal heirs of both depositors

Joint account in former/latter or survivor mode

Former/latter dies

– Survivor

Former/latter dies

– Survivor

Both depositors die

– Nominee

Both depositors die

– Legal heirs of both depositors

Joint account in anyone or survivors mode

One or more depositor dies

– Any of survivor/s

One depositor dies

– Legal heirs of deceased + survivors

All depositors die

– Nominee

All depositors die

– Legal heirs of all depositors

In the absence of nomination banks make payment up to a stipulated amount, which depends on the bank, without insisting on legal documents, provided there is no dispute among claimants and they provide an indemnity.

Procedure for making deceased claim

If the depositor had made nomination or mandated operation of account by survivors in a joint account it is easier to get balances settled. Nominee or joint account holder can submit application and on producing death proof at the branch can get amounts transferred to his bank account. In the absence of these legal heir/s would have to provide provide indemnity, other legal heirs than the claimant would have to relinquish their claims, and satsify several documentation requirements.

Claims of value higher than a stipulated amount may be settled only against legal representation such as succession certificate.

List of documents is detailed in paragraph below. After proving relevant documents bank is expected to transfer funds to the claimants account within 15 to 30 days.                                                                                          

Documents required for bank deposit death claim

Basically two documents are required under any circumstance:

i. Request letter from claimant along with accepted identity proof

ii.Copy of death certificate

In addition depending on the value of claim and mode of account few more documents may be required-

i. Stamped receipt signed by all claimants/legal heirs

ii. Indemnity letter and Affidavit

iii. Asset & liability statement of sureties

iv. Succession certificate

Many banks provide documentation list and forms for download on their website for ease for customers.

Premature closing of term deposit of deceased

Nominees or eligible beneficiaries can request for premature termination of term deposit. This will not invovle penalty charge.

If depositor dies before maturity date of term deposit banks continue to pay interest till maturity as per terms of contract. Usually simple interest at the same contracted rate is paid after maturity until deposit is claimed. However if depositor dies after maturity then savings deposit rate is paid on the deposit.

Having nomination or survivorship in case of joint account makes settling claims of a deceased bank depositor easier. Banks are supposed to follow hassle-free procedure for settling death claim of depositors with minimum documentation and least inconvenience to the claimants. Similar procedure and documentation is applicable in case of bank lockers as well.

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