Can an NRI be a nominee for PPF, NSC or SCSS? Here’s what happens to the money after the account holder dies

NRIs can’t invest in India’s small-savings schemes like the Public Provident Fund (PPF), National Savings Certificate (NSC) and the Senior Citizens Savings Scheme (SCSS). But if you already have one of these accounts, can you designate an NRI family member as your nominee?

If you have one of these accounts and are considering naming an NRI family member as your nominee, it is crucial to know what the regulations actually permit.

Can an NRI be nominated for a PPF, NSC or SCSS account?

An NRI can generally be named as a nominee for PPF, NSC and SCSS accounts, as the nomination provisions under these small-savings schemes do not generally restrict nominees to resident Indians.

Also read: Should you close your PPF account after becoming an NRI? Here’s what to know about maturity, withdrawal, and tax rules

“A nomination can generally be made at the time of opening the account or subsequently, in accordance with the applicable scheme rules,” says Gautam Bhasin, Founder & CEO at Prospurts Wealth.

In 2023, the government made it possible for NRIs to be nominated for these small-savings schemes through an amendment.

Of course, being eligible to be a nominee does not mean that an NRI can open or operate these schemes as an investor. The NRI receives the proceeds as a nominee after the account holder's death, subject to the applicable scheme and succession rules.

“However, the nominee's ability to receive and subsequently remit the proceeds abroad is subject to applicable FEMA and banking rules,” says Vishwajeet Goel, CEO, Pensionbazaar.

“Nomination charges were also removed in 2025, making it easier for account holders to add or update nominees,” says Adhil Shetty, CEO, BankBazaar.

If an NRI nominee receives PPF, NSC or SCSS proceeds, can the money be repatriated abroad?

This is where NRIs need to be careful. Being named as a nominee does not mean that the proceeds can automatically be transferred overseas.

The claim proceeds are normally paid in India through the prescribed banking/payment process.

“For an NRI nominee, the proceeds are paid to an NRI nominee on a non-repatriation basis and are generally credited to an NRO account rather than sent directly overseas,” says Shetty.

Once credited to the NRO account, subsequent remittance abroad is governed by the FEMA and RBI rules applicable to NRO balances.

“An NRI may generally remit up to USD 1 million per financial year from eligible NRO account balances and eligible assets acquired through inheritance or legacy, subject to applicable taxes, documentary requirements and the satisfaction of the authorised dealer bank,” says Bhasin.

This USD 1 million facility is separate from the Liberalised Remittance Scheme (LRS), which applies to resident individuals.

Also read: NRI selling property in India: Should sale proceeds go to an NRE or NRO account? Know repatriation limits and RBI rules

“Depending on the nature and amount of the remittance, the authorised dealer may require tax-related documentation, including Forms 15CA and 15CB where applicable. It is therefore preferable not to state that these forms are required in every case,” says Bhasin.

Suppose, an NRI daughter living in Canada is nominated for her father's SCSS account. Following his death, the account proceeds become payable in accordance with the applicable scheme rules and succession laws. Once she is legally entitled to the funds and receives them in India, she may approach her authorised dealer bank for remittance to Canada, subject to FEMA/RBI rules, the USD 1 million annual facility where applicable, tax compliance and the required documentation, explains Bhasin.

Can NRIs continue holding PPF, NSC or SCSS accounts in India?

The rules for being a nominee are different from the rules for being an account holder.

While an NRI cannot open a new PPF, NSC or SCSS account, an account opened while the person was a resident may continue or be encashed after they become an NRI, depending on the specific scheme rules.

“For example, an existing PPF account may generally continue until its original maturity, whereas the treatment of NSC and SCSS must follow their specific scheme provisions,” says Goel.

However, an NRI cannot extend the PPF account beyond its original maturity in further five-year blocks.

What documents does an NRI nominee need to claim the proceeds?

Account holders should ensure that the nominee's full name, relationship, address and other required identification details are correctly recorded and timely updated.

According to Bhasin, an NRI nominee claiming the proceeds may typically be required to provide:

• Death certificate of the account holder
• Account passbook, certificate or investment records, where applicable
• Identity and address proof
• KYC documents
• Details of the bank account into which the proceeds are to be credited
• Additional documents establishing NRI status or overseas residence, where required by the paying institution
• Any succession-related documents required where the nomination does not conclusively establish beneficial entitlement

The exact documentation may vary depending on whether the investment is held through a post office or a bank and the applicable scheme and operational procedures.

For NRI nominees, the key point is that nomination allows them to claim the proceeds, but it does not by itself give them an unrestricted right to transfer the money overseas. The payout is generally made in India on a non-repatriation basis, while any subsequent remittance is subject to FEMA, RBI limits, tax compliance, and the requirements of the authorised dealer bank.