How to Add a Nominee in a Demat Account

Your Demat account might live forever online, but you won't. Yeah, we said it. And while your investments are sitting in your portfolio, have you ever stopped to ask: What happens to all this money when I'm not around?

It's not exactly dinner table convo, but ignoring it can leave your loved ones in a major mess. Here's the wild part: somewhere between ₹50,000 and ₹80,000 crore (yes, crore) is stuck in unclaimed Demat accounts, mutual funds, and insurance policies across India. Why? Because most people never added a nominee.

According to SEBI, nearly 72% of individual Demat account holders have chosen not to appoint one. This small oversight can turn into a major headache for your family, forcing them to deal with long, complicated legal procedures just to access money that's rightfully theirs.

But don't stress. We've got you. In this guide, we're breaking down SEBI's new rules, showing you how to nominate someone (it's easier than you think), and making sure your portfolio doesn't become part of the "unclaimed" club. Let's get into it.

Table of Contents

• What is a Nomination in a Demat Account?
• Why is Nomination Absolutely Critical? 
• The SEBI Mandate for Nomination in a Demat Account
• How to Add, Update, or Change a Nominee
• Nomination Rules and Scenarios

What is a Nomination in a Demat Account?

Nomination in a Demat account means officially naming someone to receive the securities and assets in your account in case of your death. This person, called the nominee, becomes the point of contact for handling the transfer of your investments.

The nominee doesn't necessarily become the owner of your shares, but also acts as a bridge. They make sure your assets are passed on smoothly to your rightful heirs. Their role helps avoid delays and confusion, especially during an already emotional time for your family.

Think of the nominee as someone you trust to carry out your financial handover. It's a simple yet powerful step in your financial planning journey. It also gives your Depository Participant (DP), the entity that manages your Demat account, clear instructions on who should be contacted so your investments don't sit frozen in the system.

Adding a nominee keeps your financial legacy on track and protects your family from legal hassles later on. Now that we've covered the basics, let's talk about why this step is critical.

If you're still figuring out the basics of investing, this Demat Account Opening guide will help you open your account in a few simple steps.

Why is Nomination Absolutely Critical? 

If you're still on the fence, here are the core benefits of nominating someone for your Demat account:

• Seamless transfer of securities: With a nominee in place, the transfer of your shares, bonds, and mutual funds is straightforward and hassle-free. This avoids your hard-earned investments getting locked in administrative limbo for months or even years.
• Avoidance of legal labyrinths: Without a nominee, your heirs are thrown into a legal maze. They may need to secure a succession certificate, a probated will, or a letter of administration from the courts. This process is notoriously complex and time-consuming, not to mention expensive and emotionally draining.
• Protection of investments: A clear nomination prevents your assets from becoming unclaimed or, worse, the subject of bitter disputes among your heirs. It clearly states your intentions, leaving no room for ambiguity.
• Financial security & peace of mind: Knowing that your assets will be transferred smoothly provides immediate financial support for your dependents. A proactive step like this offers immense emotional reassurance, ensuring your loved ones are cared for in your absence.

These benefits explain why nomination isn't optional anymore. Let's take a closer look at what SEBI now requires all investors to do.

The SEBI Mandate for Nomination in a Demat Account

The Securities and Exchange Board of India (SEBI) has actively worked to streamline the nomination process. You might recall previous deadlines where investors were required to add a nominee or risk having their accounts frozen.

However, in a significant move to improve investor convenience, a SEBI circular dated 10 June 2024 brought a major change. For all existing Demat accounts, the regulator has stated that non-submission of a 'choice of nomination' will no longer result in the freezing of accounts.

This is a big relief for many investors who missed the deadline or were unsure about the process. However, it does not apply to new investors. It is still mandatory for all new Demat accounts to either provide a nominee or formally opt out of the facility. 

Instead of penalties, SEBI now encourages compliance through reminders. Brokers send gentle nudges, fortnightly emails and app pop-ups, reminding investors to make their nomination choice.

Even more helpful are SEBI's updated rules, effective from 1 March 2025. These updates cut down paperwork and make the inheritance process much smoother.

You can now nominate up to 10 people for your account, instead of just 3. Plus, nominees only need to submit a self-attested copy of the death certificate and basic KYC documents to start claiming the assets.

How to Add, Update, or Change a Nominee

Alright, let's get down to business. Adding a nominee is a surprisingly simple process. Both digital natives and fans of physical paperwork can handle it with ease.

Adding a Nominee Online

If your mobile number is linked to your Aadhaar, the online route is quick and convenient. Most brokers that use NSDL or CDSL follow similar steps.

Step 1: Log in

Open your broker's web platform. Make sure you log in with your credentials and complete any second-factor authentication, like OTPs.

Step 2: Find the nomination section

Once logged in, head to the 'My Account', 'Profile', or 'Settings' section. You'll usually find a tab or link labelled 'Nominees' or 'Nomination Details'. These menus are designed for user-friendliness, making the path easy to spot.

Step 3: Initiate nomination

Click 'Add Nominee' or select the option 'I wish to Nominate'. The screen will guide you to the form that needs your nominee's details.

Step 4: Fill in details

Only a few fields are mandatory:

• The nominee's full name as it appears on their ID
• Nature of relationship (spouse, parent, sibling, child, etc.)
• Percentage allocation, as in how much of your assets should go to them, such as 100% if it's one person, or split among multiple nominees.

Your nominee will also need an IDc. It can be any of the following: 

• PAN card
• Driving license
• The last four digits of their Aadhaar

No need for long forms of ID, which keeps the process short and sweet.

Step 5: E-Sign with Aadhaar

After filling in the nominee form, you'll authenticate using Aadhaar-based e-signing. An OTP is sent to your Aadhaar-linked mobile number. Input that OTP, and you're done. Confirmation typically shows up in your account within a few business days, sometimes even hours, depending on the broker's backend processing.

Adding a Nominee Offline

Go offline if any of the following apply:

• Your account is held jointly (with another person)
• Your Aadhaar isn't linked to your mobile
• You're more comfortable filling out physical forms

Step 1: Get the form

Download the nomination form from your broker's website, usually found under a 'Downloads' or 'Forms' section. Alternatively, collect it in person from a nearby branch or demat centre.

Step 2: Fill it out

Enter accurate details: your account information, nominee name, relationship, and allocation percentages. In joint accounts, all account holders must sign. Double-check for legibility and completeness.

Step 3: Submit

Visit your broker's DP branch with the filled form. You might also bring photocopies of the nominee's ID (PAN or Aadhaar). Though not always mandatory, it's wise to have them ready in case it is required. 

Once submitted, the office processes your request, similar to the online route, and your nominee gets registered in a few days.

Broker-Specific Guide

Each brokerage has its own layout, so here's a step-by-step on some of India's most popular platforms.

Zerodha

• Path: Log in to Console → click 'Account' menu → 'Nominees' section
• Details: You can add nominees via Aadhaar e-signature. For joint accounts, download and fill out the offline nomination form and submit it at a branch or workspace.

Upstox

• Path: Open the app → tap ‘Account’ (base menu) → ‘Profile’ → ‘My nominee(s)’
• Details: Add nominees online with Aadhaar OTP e-signature. For offline updates, the "Change of Nominee Form" is required, which can be downloaded or requested at a branch.

ICICI Direct

• Path: Log in, then go to 'Settings' → 'Personal Details' → scroll to 'Trading Nominee' section.
• Details: Online nominations are available only for single account holders. A joint or additional nomination requires the physical "Nomination Updation Form for Trading and Demat account".

HDFC Securities

• Online Path: Use HDFC Bank NetBanking or NSDL e-services portal. In your HDFC Securities account, look under 'Account Services' or 'My Profile' for the 'Add/Update Nominee Details' option.
• Offline Path: Submit the "E-Nomination OR Combined Nomination Form" (also known as NSDL Form 10 or CDSL Annexure 3.2) at a branch.

The cost of making financial peace with your loved ones varies depending on the broker. Many discount brokers waive online nomination fees to encourage compliance. If your broker charges a fee, completing the task offline may be free, but double-check before you submit.

Now that you know exactly how to add or update your nominee, it's time to walk through the real-world execution and impact of the nomination.

Nomination Rules and Scenarios

Understanding how nomination works is about knowing the rules that protect your assets and give your loved ones a clear path forward. Let's break down the nomination framework, one piece at a time.

Who Qualifies to Be a Nominee?

Before you start adding names to your account, it's important to know who's even eligible. Not everyone qualifies, and there are some surprising exclusions. Let's start with the basics: who gets to nominate and who can be nominated.

Who can nominate?

Demat account holders are the only ones who can initiate the nomination process. This includes individuals holding accounts singly or jointly. That said, certain entities are left out of the picture.

Non-individuals like trusts, corporations, Hindu Undivided Family (HUF) Karta, and Power of Attorney (PoA) holders are not allowed to nominate anyone. These rules are in place to maintain accountability and simplify the chain of ownership.

Who can be a nominee?

This is where you get to decide. You can nominate any individual:

• Family members
• Friends
• Relatives

Even a Non-Resident Indian (NRI) can be nominated, as long as the nomination complies with FEMA (Foreign Exchange Management Act) guidelines.

You can also nominate a minor. Just make sure you include the full details of a guardian: name, address, and ID proof. Note: you cannot name yourself as the guardian for your own nominee, even if they are your child.

Who cannot be a nominee?

Non-individuals are excluded from being nominated. This includes trusts, societies, firms, and corporate bodies. Keep your list personal and human, because that's who these rules are designed to protect.

Now that the nomination pool is clear, let's explore what happens when life throws in some complications.

The "What Ifs": Navigating Special Scenarios

Not all investor situations fit into neat boxes. From joint holdings to incapacitation, real life demands flexible solutions. Here's how the nomination system adapts to unique scenarios.

Multiple nominees

SEBI's recent update now allows up to 10 nominees per account. If you're managing a sizeable portfolio or simply want to divide your assets clearly among loved ones, this rule helps. Just don't forget to assign percentage shares to each nominee; if left blank, the system will divide your holdings equally.

Demise of a nominee

If a nominee passes away before you do, the nomination is automatically void. Their legal heirs have no right to your assets. It's your job to revise your nomination and select someone else. Think of this as part of your regular financial maintenance.

Joint accounts

Even though nomination isn't mandatory for joint accounts, it's strongly recommended. In the event of one holder's death, the surviving holder automatically retains control of the account. The nominee only becomes relevant when all joint holders have passed away.

Importantly, for the nomination to be valid in a joint account, all holders must sign the form.

Incapacitated investors

SEBI has introduced a thoughtful option for account holders dealing with physical incapacity. If you're unable to operate your account but can still make sound decisions, you can authorise one of your adult nominees to redeem a specified portion of your assets.

This comes with built-in controls like limits on percentages or asset value. And yes, a DP officer must verify this to keep everything secure.

Once a nominee needs to step in, knowing the legal landscape is crucial. Here's what that looks like, and why nomination isn't always the final word on who gets what.

Nominee and legal heir are not the same. This is one of the most misunderstood parts of the nomination process. A nominee does not become the owner of the securities. They act as a custodian, someone who receives the assets but holds them for the rightful legal heirs.

Legal heirs are determined either by a valid will or, in the absence of one, by succession laws. Even if your nominee is someone else, they must hand over the securities to the heir named in your will.

Let's look at how these two roles stack up side by side:

Feature	Nominee	Legal Heir
Role	Custodian or trustee	Final owner of the assets
Ownership	No legal ownership	Full legal ownership
Chosen By	Account holder via nomination	Will or law
Claim Process	Simple and quick	May involve courts or certificates

With that distinction clear, let's move into the final stage, the actual steps a nominee must take to claim assets.

Step-by-Step Guide for a Nominee to Claim Securities

This used to be the most frustrating part of the process. Endless paperwork, legal formalities, and back-and-forth with the DP. But with SEBI's updated rules, claiming your rightful place as a nominee is far more efficient. 

Just follow these simple steps:

• Step 1: Inform the Depository Participant (DP) about the account holder's death.
• Step 2: Collect and prepare the required claim documents.
• Step 3: Fill out the Transmission Request Form (TRF).
• Step 4: Submit the TRF and supporting documents to the DP.
• Step 5: Wait for the DP to verify the submission.
• Step 6: Once verified, the DP will transfer the securities to the nominee's Demat account.

Here's what the nominee needs to submit:

Document	Purpose	Notes
Annexure 1 (PDF)	A declaration form from the nominee	Confirms nominee's intent to claim securities
Transmission Form (Form 7.1)	Official request to transfer securities	Provided by DP; must be filled out and signed by the nominee
Death Certificate of the Deceased	Legal proof of the account holder's death	Submit original OR notarised/attested copy by a gazetted officer
PAN or Valid ID Proof of the Deceased	Identity verification of the deceased	Must be attested by the notifier (self or gazetted officer)
Self-Attested PAN of the Nominee	KYC verification for the nominee	Clear copy with the nominee's signature
Bank Proof of the Nominee	To verify bank details, especially for the crediting of balances	Acceptable proofs: personalised cancelled cheque, bank statement, or passbook (not older than 3 months)
Client Master Report (CMR) of Nominee's Demat Account	Links nominee's Demat account for share transfer	Required only if the nominee's Demat account is with a different DP; must carry DP seal and signature

Here's the best part: DPs are no longer allowed to ask for affidavits, indemnity bonds, or undertakings. The goal is to make things easier for the nominee during what is already a difficult time.

Conclusion

Nobody likes thinking about paperwork tied to "what happens after". But taking a few minutes now to set up your nomination can save your loved ones a whole lot of stress later. It's one of those small steps that does a lot of good behind the scenes.

And while the rules have become simpler, how smooth your experience is still depends on who you've opened your Demat account with. Some brokers make it quick and easy, others, not so much.

That's why picking the right broker matters more than we think. Finology Select helps with exactly that. It lets you compare 20+ brokers side by side, so you can choose the one that works best for you.

To know, how to avoid delays in inheriting physical shares, learn how to convert physical shares into demat account and simplify the transmission process for future heirs.

FAQs

How many nominees can I add to my Demat account?

Under the new SEBI rules, you can add up to 10 nominees to a single Demat account. You can also specify the percentage of holdings each nominee should receive.

What happens if I don't add a nominee now? Will my account be frozen?

For existing investors, no. As of a June 2024 SEBI circular, your Demat account will not be frozen for not having a nominee. However, for all new Demat accounts being opened, providing a nomination or opting out is still mandatory.

Can I nominate a minor?

Yes, you can nominate a minor. However, you must provide the name, address, and other details of a guardian. The account holder cannot be the guardian for their own nominee.

Is the nominee the final owner of my shares?

No, this is a common misconception. In India, a nominee acts as a trustee or custodian. The legal heir(s), as defined by a valid will or the relevant succession laws, are the final, rightful owners of the assets.

What happens if my nominee dies before me?

If a nominee passes away before the account holder, that nomination becomes null and void. The nominee's heirs have no right to the assets. You should immediately update your Demat account with a new nominee.

Do I need to pay a fee to add a nominee?

This depends on your broker. Many brokers offer online nomination for free, while others may charge a nominal fee. It is always best to check your DP's schedule of charges.

Can an NRI be a nominee?

Yes, an NRI can be appointed as a nominee for a Demat account, subject to the prevailing foreign exchange regulations (FEMA).