Want to claim fixed deposits of your deceased grandparent where there is no Will? Here’s how you can do it

Usually, a nominee is named by the depositor while making a fixed deposit

• Grandchildren may inherit FDs if their parent dies before the grandparent.
• A nominee is a trustee, not the owner; FDs devolve as per succession laws
• Banks require legal documents like a Succession Certificate to release FDs

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For many Indian families, fixed deposits (FDs) are the quiet, dependable backbone of household savings which sometimes are opened years ago, rolled over dutifully, and then largely forgotten. The trouble begins when a grandparent passes away and these deposits resurface at an emotionally difficult time. It may so happen there is no Will or the subject matter of fixed deposits is inadvertently or otherwise omitted in the Will.

In such circumstances, grandchildren may not be aware of their rights or may assume other heirs closer in relationship to the depositor may be the only ones entitled to claim the FDs.

This situation calls for one to examine the relevant personal laws such as the Hindu Succession Act, 1956 or Indian Succession Act, 1925 to understand on whom such FDs should devolve.

“For instance, in the case of Hindus (covered under the Hindu Succession Act), Class 1 legal heirs inherit simultaneously and equally. Children of pre-deceased sons or daughters of an individual are considered Class 1 legal heirs. This means that such grandchildren have simultaneous and equal rights, as any other sons or daughters or other Class 1 legal heirs of the deceased grandparent,” said Varun Sriram, Partner, JSA Advocates & Solicitors.

When a nominee is chosen

Usually, a nominee is named by the depositor while making a fixed deposit. In such cases, it is vital to understand that the nominee does not automatically become the beneficiary of the fixed deposit concerned. A nominee merely assumes the role of a trustee upon the death of the holder and needs to account for and transmit the deposit to and in favour of the legal beneficiaries as per relevant succession laws where there is no Will in place.

“The Courts in India have observed that Section 45ZA of the Banking Regulation Act, 1949 puts the nominee in the shoes of the depositor after his death and clothes him with the exclusive right to receive the money lying in the account. But it by no stretch of imagination makes the nominee the owner of the money lying in the account,” said Sriram.

All the monies receivable by the nominee by virtue of this Section would form part of the estate of the deceased depositor and devolve according to the rule of succession to which the depositor may be governed, Sriram added.

As a practice, the nominee is required to file an affidavit with the bank stating that the money received by him/her is held in trust, and he/she undertakes to disburse it to the legal heirs upon determination. Typically, the nominee furnishes the bank with an indemnity bond and the death certificate of the deceased, besides other KYC documents.

When a nominee is absent

When a nominee is absent, the claim does not automatically lapse; instead, the legal heir(s) can approach the bank directly with the required documents to establish their right to the deposit and complete the claim process.

Sriram says, “In the case where no nominee is named or the nominee predeceases the depositor, and it is not a joint account with a survivor clause, the legal heir(s) of the depositor can make a direct claim on the deposit with the Bank. This will involve the legal heir(s) to make an application with the bank along with supporting documents such as the death certificate of the depositor, succession / legal heirship certificate, indemnity bond, affidavit and KYC documents of the legal heirs for processing the claim.”

Claiming the fixed deposits of deceased grandparents is less about navigating complex law and more about approaching the process methodically and with the right documents. Banks are bound by regulation, not sentiment, and delays usually arise from gaps in paperwork rather than disputes over entitlement.

What helps

For families, this is also a gentle reminder that the value of basic estate planning, clear nominations, a simple will, and transparent records can spare the next generation significant stress.

Monika Taparia, Head of Legal at AasaanWill, says, “If a grandparent passes away without a Will, fixed deposits are settled as per intestate succession laws—not family expectations. Grandchildren are typically not direct heirs unless their parent has predeceased the grandparent. Banks will insist on legal documents like a Succession Certificate before releasing funds, regardless of nomination. This is why succession planning through a simple Will can save families significant time, cost, and confusion.”