How to Add A Nominee to Your Demat Account in 2025 – Step-By-Step Guide

Opening a Demat account holds digital records of your shares and securities, making it a crucial component of your financial portfolio. However, have you ever wondered what happens to these investments in case of an unforeseen event? That’s where nominating a beneficiary becomes essential. Appointing a nominee ensures your loved ones can seamlessly inherit your assets without legal hurdles.

If you're still uncertain about how to add a nominee to your Demat account, this step-by-step guide will walk you through both online and offline methods. Additionally, it will explain eligibility criteria, outline regulations, and highlight why nomination can safeguard your financial legacy.

Understanding the Basics: What is a Demat Account?

A Demat (Dematerialisation) account serves to hold shares and other securities electronically, removing the need for physical certificates. This account enables faster transactions, minimal paperwork, and increased security in managing investments. To invest or trade in stocks and mutual funds, having a Demat account is essential for all investors.

Who is a Nominee? Nomination in a Demat Account Explained

A nominee is the person you designate to inherit the holdings in your Demat account if you pass away. This person acts as a custodian of your assets, ensuring they are managed and transferred as intended.

In the context of a Demat account, nomination is the process of designating an individual to inherit your securities in the event of your demise. This provision simplifies the transmission of shares and helps prevent your investments from going unclaimed. It also eliminates the need for your family to undergo time-consuming legal procedures to claim the assets.

Without a nominee, even close family members may struggle to trace and access your investments, especially if you haven't maintained detailed records. Naming a nominee across all your investment accounts ensures your financial legacy is preserved and reaches the right hands.

Why Nominating Someone for Your Demat Account is Essential?

Appointing a nominee provides financial continuity and security to your loved ones. In the event of your passing, the nominated person can claim the securities without facing legal barriers or court proceedings. This helps prevent unnecessary legal expenses and delays, ensuring your investments are promptly transferred and not left dormant demat account or unclaimed.

Additionally, it acts as a preventive measure against possible conflicts among heirs by clearly indicating your intention regarding who should receive the assets.

Who Can Be Appointed as a Nominee? Key Eligibility Requirements

Before learning how to add a nominee to your Demat account, it's important to understand who is eligible for this role. The nominee doesn’t have to be related to the account holder, but must meet a few basic criteria set by Indian regulations:

• Age Factor: Anyone aged 18 or older can be nominated. Minors can also be named, but a guardian must be assigned to manage the account until the minor turns 18.
  
• Nationality: The nominee must be an Indian resident to legally inherit and hold securities.
  
• Relationship Flexibility: There are no restrictions on who can be nominated - family members, friends, or even trusted associates are all valid choices.
  
• Nomination Limit: Up to 10 individuals can be nominated per Demat account, with each nominee assigned a specific percentage of holdings that adds up to 100%.
  
• KYC Compliance: Nominees must meet standard KYC (Know Your Customer) requirements, submitting valid identification and address documents like a PAN card, Aadhaar, or passport.
  
• Consent & Awareness: While not legally mandatory, it’s advisable to inform and obtain the nominee's consent to avoid confusion during transmission of assets.
  
• Across Accounts: A single person can be nominated in multiple Demat accounts, even if held with different brokers.
  
• Flexibility to Update: Account holders have the flexibility to update or revoke nominations at any time by submitting a new request.

Note: Nominees must be individuals. Entities like companies, trusts, or HUFs (including the Karta) cannot be nominated.

Adding a Nominee to Your Demat Account: A Step-by-Step Guide

Managing your investments responsibly includes ensuring they are passed on without legal hassle. Adding a nominee to your Demat account is one of the most crucial tasks.

Let’s take a look at how you can add a nominee to your Demat account through both online and offline processes:

Online Nomination Process for a Demat Account

Adding a nominee online is fast, secure, and paperless. Follow these steps:

1. Navigate to the Nomination Section: Start by logging into your broker’s website or app. Head to the ‘Profile’ or ‘Account Settings’ section, which is where most platforms provide the option to manage nominees.

2. Initiate the Nomination Process: Click on the ‘Add Nominee’ or ‘Nomination Details’ feature. You can also specify how your holdings should be split among them.

3. Enter Nominee Details: Provide the necessary information for each nominee, such as:

• Full Name (as per government ID)
• Date of Birth (to verify age, especially if the nominee is a minor)
• PAN Number (mandatory for compliance)
• Relationship to You (spouse, child, friend, etc.)
• Percentage Share (ensure the total equals 100% if adding multiple nominees)

4. Confirm and Validate: Carefully review the nominee information for accuracy, then complete the authentication process.

5. Digitally Sign the Form: You will be prompted to e-sign the nomination form using your Aadhaar-linked OTP, sent to your registered mobile number. This e-signature ensures the nomination is legally valid and tamper-proof.

6. Receive Confirmation: After submission and successful e-verification, you’ll receive a confirmation message via SMS or email, confirming that your nominee has been added to your Demat account.

Offline Nomination Process for a Demat Account

If you prefer the traditional paper-based process, here’s how you can nominate someone manually:

1. Get the Nomination Form: Visit your Depository Participant (DP), the entity where your Demat account is held, and request the nomination registration form.

2. Fill in the Required Details: Please fill in the form with the nominee's required details, including their:

• Name and address
• Date of birth
• Your Demat account number
• Share percentage (if applicable)

3. Attach Supporting Documents: Along with the form, include necessary documents such as identity and address proof for yourself and, if required, for the nominee. Acceptable documents include PAN card, Aadhaar card, or passport copies.

4. Submit to the DP: Hand over the completed form and documents in person or as per your DP’s submission process (some may accept postal submissions). Your DP may also ask you to sign in front of an official for verification.

5. Get Acknowledgement: After submitting, you’ll receive a receipt as proof that your nomination request has been accepted.

6. Update Confirmation: Once the DP processes your request, the nominee’s information will be updated in your Demat account records. You may receive a notification or account statement reflecting the changes.

Key Highlights of SEBI’s Updated Nomination and Transmission Guidelines (2025)

As per the latest SEBI circular issued on January 10, 2025, several changes have been introduced to simplify and streamline the nomination and asset transmission process. Here’s a breakdown of the revised provisions:

1. Maximum Number of Nominees Increased:

Investors are now allowed to appoint up to 10 nominees (earlier 3) for each Demat account or mutual fund folio. This enhancement offers greater flexibility for those wishing to divide their holdings among multiple beneficiaries.

2. Simplified Process for Joint Holders:

In accounts held jointly, the surviving account holder will only be required to submit a copy of the deceased holder’s death certificate. No additional documents like KYC forms, undertakings, or indemnity bonds will be needed from the survivor.

3. Power of Attorney (POA) Restrictions:

Individuals acting under a Power of Attorney are not permitted to add nominees on behalf of the investor. Only the actual account holder(s) can register nominations.

4. Options for Nominees After Transmission in Joint Holdings:

When assets are transmitted due to the death of a joint holder, the nominated individuals may choose either to:

• Continue as joint holders with the remaining nominee(s), or
• Separate their share by opening individual accounts or folios for their respective entitlements.

5. Nominee Authorisation in Case of Physical Incapacity:

For single-holder accounts, SEBI now permits investors to authorise one of the registered nominees (excluding minors) to manage the account if the account holder becomes physically incapacitated but retains legal capacity. This mandate can:

• Grant authority to operate the account,
• Define the portion (as a percentage or fixed amount) that the nominee may encash, and
• It can be revised or revoked any number of times, offering complete flexibility.

6. Simplified Transmission Requirements:

In the event of the account holder's death, transferring assets to the nominee(s) will now require only three key documents:

• A self-attested copy of the death certificate of the deceased,
• KYC verification or revalidation for the nominee(s),
• Creditor release confirmation (only if the account has outstanding loans secured by pledged assets).

Importantly, no additional declarations, notarised affidavits, indemnities, or undertakings can be demanded by depository participants or other regulated entities. Any legal disputes regarding ownership or claims must be resolved between the involved parties, the intermediaries will no longer be held responsible for such conflicts.

Advantages of Appointing a Nominee to Your Demat Account

Appointing a nominee to your Demat account is not just a formality; it’s a vital aspect of sound financial planning. Here’s why every investor should seriously consider this step:

• Easy Transfer of Assets: A nominee enables quick transfer of securities without legal delays or court procedures.
  
• Prevents Family Disputes: Clearly identifies your chosen beneficiary, avoiding conflicts or multiple claims.
  
• Avoids Unclaimed Investments: Without a nominee, your assets risk being transferred to the Investor Education and Protection Fund (IEPF) if no claims are made.
  
• Complete Control Over Distribution: Nominate up to 10 individuals, set percentage shares, and update anytime as your wishes change.

Key Considerations Before Appointing a Nominee to Your Demat Account

• For new investors, nominating a beneficiary is compulsory, unless it's a joint Demat account or mutual fund portfolio.
  
• Ensure the nominee’s full name, date of birth, and relationship are entered exactly as per official documents.
  
• The nominee is only a custodian, not the legal heir. Legal heirs can still claim rights if contested in court.
  
• If your nominee is a minor, you must appoint a guardian to manage the account until the nominee reaches legal age.
  
• Review and revise your nomination after major life changes, like marriage, divorce, or the birth of a child, to ensure it aligns with your current wishes.
  
• If nominating multiple people, ensure the total distribution adds up to 100%.
  
• Entities like companies, trusts, or societies cannot be nominated; only individuals are eligible.

Final Thoughts

Adding a nominee is not just a regulatory requirement; it’s an act of responsibility. It's fast, free, and safeguards your loved ones from future uncertainties. Whether you prefer digital tools or the traditional route, now you know exactly how to add a nominee in your Demat account without any hassle. Act today, and give your financial planning a strong foundation for tomorrow.

Frequently Asked Questions (FAQs)

What is the last date to add a nominee in a Demat account?

While SEBI had previously set June 30, 2024, as the last date to add a nominee in a Demat account or opt out, failing which Demat accounts faced the risk of being frozen, the latest update (as of June 2024) has eased this restriction for existing account holders. Nonetheless, it remains strongly recommended to complete the nomination process to ensure regulatory compliance and safeguard your investments.

Is it mandatory to add a nominee in a Demat account?

It's now mandatory for new investors to provide a nominee if they hold a mutual fund or Demat account in their single name. For joint account holders, adding a nominee remains an option but isn't compulsory.

Can you appoint more than one nominee for a Demat account?

Yes, you can name multiple nominees, up to a maximum of 10, and also specify the percentage of shares each nominee will receive.

What is the process to update or remove a nominee from my Demat account?

You can update nominee details online via your broker’s platform or submit a physical modification form offline.