June 30 is the deadline to appoint nominees for your demat and MF accounts; why you need to get your nominations in order
Sebi had initially set a deadline of 31 March 2023 for account holders to nominate beneficiaries or formally opt out. The regulator had indicated that non-compliance would lead to account deactivation. The deadline was later extended twice, with the previous extension until 31 December 2023.
Despite the warning and extension of deadline, investors have abstained. What is startling is that a whopping 69.73% or 9.51 crore account holders have deliberately chosen not to nominate anyone, that is, they have consciously opted out of nomination. Harsh Roongta, Founder, Fee Only Investment Advisers, says ignorance is only a part of the reason.
“Death is far from people’s minds when they open a demat account. In recent years, in a rush to open demat accounts and get in on the market action, a lot of doit-yourself investors have simply chosen to bypass the critical step seeking nominations,” he says.
Experts warn that ignoring nominations in investments can make life cumbersome for family members after the death of the account holder. While grieving, successors will be forced to seek court orders and face other hardships to get access to assets built by the deceased for their benefit.
Amol Joshi, Founder, PlanRupee Investment Services, insists, “Making nominations in your investments is necessary hygiene. If this is in place, a simple death certificate is usually enough to get assets transferred to the nominee.” Roongta avers, “The extra minute or two that it takes to register a nominee while opening an account is priceless. It ensures that your loved ones get smooth access to your assets after your death.”
