How to Claim a Fixed Deposit After the Holder's Death: Nomination, Survivorship, and Legal Heir Rules (2026)

By Nitish Bharadwaj · Published Aug 4, 2026 · 6 min

When an FD holder dies, RBI's 2025 Directions on settlement of deceased-customer claims govern what happens next, and the process differs sharply depending on whether there's a nominee, a surviving joint holder, or no nomination at all. Banks must settle within 15 days of complete documents, and a simplified no-succession-certificate route now applies up to ₹15 lakh at commercial banks (₹5 lakh at co-operative banks). This guide covers the documents needed for each scenario, how FD interest is taxed after death, and the new multiple-nominee rules effective since November 2025.

A fixed deposit doesn't stay locked forever when the person who opened it dies — but who gets paid, and what paperwork they need, depends entirely on how the account was set up beforehand. RBI's Settlement of Claims in respect of Deceased Customers of Banks Directions, 2025 rewrote the rules banks must follow, with a hard 15-day settlement clock and a simplified route that skips court paperwork entirely for many families. Here's exactly what applies to your situation — nominee, joint holder, or neither.

The Three Scenarios That Determine the Process

Every FD death claim falls into one of three buckets, and the bucket you're in decides everything else — how much paperwork is needed, whether other family members have to sign off, and how long the bank can take. Get this part right before gathering documents, because a joint-account claim and a no-nominee claim look almost nothing alike.

If There's a Valid Nominee

A nominee isn't automatically the new owner of the money — legally, they receive it as a trustee on behalf of all legal heirs, though in practice the bank's job ends once it pays the nominee against a death certificate, the nominee's own KYC documents, and a claim form. The bank doesn't ask other family members to sign off, and it doesn't get involved in how the nominee later distributes the money among heirs — that's a private family matter, or a court matter if it becomes a dispute.

If It's a Joint or Either-or-Survivor Account

Survivorship overrides nomination. If the FD was opened as an Either-or-Survivor or Former-or-Survivor joint account, the surviving holder simply continues operating the account, or claims the proceeds at maturity, on production of the death certificate — regardless of who was named as nominee, or whether there was a nominee at all. This is usually the fastest of the three routes, since there's rarely a documentation dispute over who the money belongs to next.

If There's No Nominee: Legal Heir Claims

This is where the paperwork gets heavier — and where RBI's 2025 Directions actually simplified things. For claims above ₹15 lakh at a commercial bank (₹5 lakh at a co-operative bank), banks can insist on a succession certificate, letter of administration, or probated will before releasing funds — documents that typically mean a court process running into months. Below that threshold, banks must use a simplified procedure instead: a claim form signed by all legal heirs, a death certificate, ID proof, an indemnity bond, and either a legal heir certificate or a notarised affidavit — no succession certificate, and no third-party surety demanded. Treat this threshold as a floor, not a ceiling — some banks extend the simplified route further at their own discretion, so it's worth asking rather than assuming the stricter route always applies above it.

Multiple Nominees Are Now Allowed

The Banking Laws (Amendment) Act, 2025, in force from November 1, 2025, ended the old one-nominee-per-account rule for deposits. You can now name up to four nominees on a single account, either simultaneously — each entitled to a fixed percentage share you specify — or successively, where the second nominee's claim activates only after the first nominee has died. Lockers and safe-custody articles still allow successive nomination only, not simultaneous shares — our bank locker rules guide covers that distinction along with the separate 100x-rent liability cap that applies specifically to lockers. If your FD nomination predates November 2025, it's still valid, but it's worth revisiting — a single named nominee no longer has to be the only option.

How the Interest Gets Taxed

FD interest earned up to the date of death belongs on the deceased person's final income tax return, filed by a legal representative registered for that purpose on the e-filing portal — not by the person who eventually receives the money. Interest that accrues after the date of death, until the bank actually settles the claim, is taxed differently: it's income in the hands of whoever receives it, reported under 'Income from Other Sources' on their own return. Splitting these two periods correctly is what most families get wrong, since it's tempting to report the entire year's interest in one return or the other.

For the paperwork side of naming someone in the first place, our FD nomination rules guide covers who you can name and how to update it. If the FD in question is a joint account and you're weighing the tax implications, our joint FD account tax rules guide is a useful next read, and our Form 15G/15H TDS guide explains how TDS applies once the claim is settled and the new account holder starts earning interest on the money. If the same family also holds a PPF, NSC, KVP, or Sukanya Samriddhi account, the death-claim process runs on a different set of rules entirely — our post office scheme death claim guide covers those separately.