How to withdraw investments after death of investor

If an investor passes away when the lock-in period of his or her investments are in force, different rules apply for different instruments.

Equity Linked Savings Scheme (ELSS)
ELSS is subject to a three year lock-in. If an investor dies, the nominees can withdraw the money before completion of the lock-in, provided a year has passed since allotment.

Public Provident Fund (PPF)
PPF accounts are subject to a lock-in of 15 years. In case of death during the lock-in period, the nominees can withdraw the amount on submission of requisite documents.


Fixed deposits
In case of five year tax saving fixed deposits with banks, death of the investor can mean the nominee can withdraw the deposit even during the lock-in period.

GOI bonds, corporate deposits
In case of GOI bonds, the bond will be transferred to the nominee. But no premature withdrawal is possible. For corporate fi xed deposits, it depends on the terms of issue. It is at the discretion of the company to liquidate the deposit on the demise of the deposit holder.

Documents
In most cases, the nominee must fi ll requisite forms. This has to be supported with documents like copy of death certifi cate, investment papers, letter of indemnity, affidavit by the claimant, succession certificate/letter of administration and an attested copy of probate of will.

Points to note

1. In case of death of a Karta of a Hindu Undivided Family (HUF), the new Karta will take over the PPF account.
2. Nominee will act as a trustee and will have to distribute the amount to legal heirs.


The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.