FD left without a Will? Here's how children, grandchildren can claim money

Legal experts explain when children or grandchildren can inherit FDs, what nominees can do, and which documents banks will ask for

Fixed deposits (FDs) are a common savings tool across Indian households. But when a depositor dies without leaving a Will, families often struggle to understand who can legally claim the money, whether it is children, grandchildren, or other heirs. The answer depends on succession law, nomination status, and documentation, according to legal experts.

 

Who has the first right to the FD?

Under intestate succession (death without a Will), children and spouse of the deceased are the primary heirs in most cases.

 

Grandchildren do not automatically get a direct right if their own parent, the deceased person’s child, is alive. Their claim arises only in specific circumstances.

 

 

“Grandchildren inherit only where their parent, being the son or daughter of the deceased, had predeceased the depositor. They step into that parent’s share under the doctrine of representation,” said Priya Gada, advocate, D. M. Harish & Co. She added that Sections 8 to 10 of the Hindu Succession Act classify such grandchildren as Class I heirs in that limited situation.  Grandchildren can inherit an FD only if their parent (the depositor’s child) died before the grandparent; they then take that parent’s share, while they have no direct right if the parent is alive, said Alay Razvi, managing partner, Accord Juris.

 

Prerna Robin, principal associate, B Shanker Advocates LLP, said grandchildren then collectively receive the share their deceased parent would have received.

 

Does a nominee become the owner?

Experts are clear that nomination does not equal ownership.

 

“A nominee is merely a trustee who can collect the money from the bank but must pass it on to the rightful legal heirs,” Robin said. This principle has been repeatedly upheld by courts, Gada noted.  A nominee is only a trustee, not the legal owner of the FD, Razvi added.

 

Prateek Jha, advocate, Supreme Court of India, said banks release funds to nominees after basic checks such as death certificate and KYC documents, after which the bank’s responsibility ends, but the nominee remains accountable to heirs.

 

If there is no nominee

Claims become more document-heavy where no nominee is registered.

 

Banks typically ask for:

 

·  Death certificate

 

·  Identity and address proof of claimants

 

·  Indemnity bond and affidavits

 

·  Legal heir, heirship, or succession certificate

 

“For higher-value deposits, most banks insist on a succession certificate from a civil court,” Jha said. He added that uncontested cases usually take three to six months. Supriya Majumdar, partner, Elarra Law Offices, said some court processes can run six to 12 months.

 

What causes delays?

Common triggers include missing nominations, KYC mismatches, and disputes among children or grandchildren. Keeping nominations updated, records consistent, and making a Will significantly reduces claim friction, experts said.

 

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