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Joint Account vs Nomination in case of deposits or other investment: Which is better?


Joint Account vs Nomination in case of deposits or other investment: Which is be
You can hold deposits or other investment in a joint account (with the name of any of your blood relation or any other party) specified as the joint owner of the account or in the other case make someone a nominee for your investments. Of the two, which is a better option is the matter of discussion in the following article.

While in a joint account, transactions in some cases can be routed only if both the account holders agree and sign the necessary documents. Mutual fund account held jointly requires signatures of all the account holders before the final execution of the transaction. However, in case when the name of the joint account holder is specified as either anyone of survivor, transactions can be effected even without the signature of the other account holder.


Nominee, as otherwise, has no right to make transactions in the held account, and only in the event of the death of the primary account holder has the right to the deposit proceeds. Same goes with investments, which shall accrue to him in case the primary account holder dies. The capital market watchdog, SEBI, allows appointment of a maximum of three nominees against mutual fund and equity investment.

Which is better appointing a nominee or maintaining investment or deposit account in joint name?

Maintaining a deposit account or investment in a joint name is always better as in an unfortunate event of death of the primary account holder, settlement of claim or transference of proceeds is made rather easily to the joint holder than the nominee though the formalities are more and less same. The joint account can be maintained in either of the modes i.e. joint account or 'either or survivor' at the discretion of the account holders.

And, more so a nominee (can even be appointed in case the account is held jointly with second or third joint account holder) and in some cases he can only be the claimant or may be receiving proceeds of the deposit account of the deceased as a trustee of the legal heirs. Despite, this know about the importance of nomination in case of deposits, insurance and post office.

Story first published: Wednesday, April 2, 2014, 14:52 [IST]
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