How to Add a Nominee to Demat Account

Recognizing the importance of having a nominee, the Securities and Exchange Board of India (SEBI) vide a circular published on July 23, 2021, made it mandatory for all demat account holders to appoint a nominee. 

The initial deadline according to the circular was set as March 31, 2022, which was later extended to September 30, 2023. Failure to appoint a demat account nominee within the due date would lead to the account getting frozen for debit transactions. 

But what is a demat account and how do you add a nominee to it? In this article, we’re going to take a look at just that. 

What is a Demat Account? 

A demat account is an account that’s used to electronically store shares and other securities. It is one of the two mandatory accounts you need to participate in the stock markets. 

In India, there are two depositories that currently offer demat accounts – the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). You can open a demat account with either of these two depositories through a depository participant (DP). 

How to Add a Nominee To a Demat Account?

Now that you know what a demat account is, let’s take a look at the simple step-by-step process that you need to follow to appoint a demat account nominee.

Steps to Add a Demat Account Nominee – NSDL 

If your demat account is with the National Securities Depository Limited (NSDL), you can complete the demat account nomination process online. Here’s a quick look at the steps involved.  

• Step 1: Visit this link: https://eservices.nsdl.com/instademat-kyc-nomination/#/login
• Step 2: Enter details such as your depository ID (DP ID), client ID and your PAN in the relevant fields and click ‘Submit’. 
• Step 3: An OTP will be sent to the registered mobile number and email address. 
• Step 4: Enter the OTP that you receive in the relevant field and click ‘Submit’. 
• Step 5: Click on the ‘I wish to Nominate’ button and proceed. 
• Step 6: Enter all the details as required in their relevant text boxes and click ‘Submit’. 
• Step 7: You will be redirected to a new webpage where you will need to enter the OTP sent to your registered mobile number. 
• Step 8: Once you enter the OTP and proceed, you will be redirected to another webpage for Aadhaar eSigning. 
• Step 9: Here again, you will be required to enter an OTP sent to the number linked with your Aadhaar. 
• Step 10: Upon successful verification, you will be redirected to the NSDL website, where you need to enter a third OTP to complete the nomination process. 

Steps to Add a Demat Account Nominee – CDSL

On the other hand, if your demat account provider is the Central Depository Services Limited (CDSL), you can only check the demat account nominee status online. 

To add a demat account nominee, you will have to physically fill and submit the nomination form to your depository participant. It is essential to keep in mind that in addition to your signature, the nomination form also requires you to get the signatures of two independent witnesses as well. 

Alternatively, some stockbrokers allow you to add a CDSL demat account nominee through their trading portal. In such cases, all you need to do is log into your trading account and navigate to your profile. Look for the ‘Nominee’ option and complete the process. 

Things to Keep in Mind When Adding a Demat Account Nominee 

Before you add a nominee to your demat account, there are a few things that you need to be aware of. 

• Accepted List of Nominees 

A demat account nominee can be any individual, whether they’re related to you or not. This includes your spouse, children, parents, siblings or even friends and acquaintances. Even minors can be added as a nominee as long as you provide the details of their guardian. That said, you cannot nominate non-individuals like companies, Hindu Undivided Families (HUFs), associations or societies.  

• Maximum Number of Nominees 

One of the many myths surrounding demat account nominees is that you can only add one individual. However, that’s not true. In fact, you can add up to 3 individuals as nominees for your demat account and even assign percentages to each person. 

• Change of Nominee 

If you’ve already appointed an individual, you can at any point in time change or modify the details of the nominee. 

Conclusion

Assigning a nominee to your demat account can make the process of claiming shares and other securities in your account after your demise a lot easier. Otherwise, the transmission of securities can get very complicated if there’s no nominee assigned to a demat account. This is especially true if the value of the securities is high. 

So if you haven’t appointed a nominee for your demat account to date, consider completing the process as soon as possible before the stipulated deadline. This way, you can prevent your demat account from getting frozen.