In today's digital investment environment, a demat account is not merely recommended but an absolute necessity to participate in the equity marketplace. However, just setting up a demat account is not enough; you need to ensure that your holdings are protected and transferable in case the unfortunate happens. This is where the nomination in your demat account comes into play, and is essential. This article explains everything you need to know about how to update a nominee in a demat account, whether online or offline, what documents you will need, the period, and best practices.

What is a Nominee in a Demat Account?

The term 'nominee’ refers to a party or person designated by the holder of the demat account to inherit the securities and holdings, if the account holder passes away, or for whatever reason. The nominee is the legal beneficiary in this case. It makes things easier in terms of the transmission of shares or other securities and reduces the need for legal proceedings, such as succession certificates, etc.

The recent amendments to the SEBI regulations require the notification of a nominee, or an explicit declaration that the account ignores anything to do with nominations. This was done ultimately to provide more comfort to investors while offering a clear process to administer accounts, and preventing disputes.

Why Is It Important to Add or Update a Nominee?

Neglecting to make a nomination may make the asset transfer more complicated, and in that scenario, survivors must apply for a succession certificate, a legal heir certificate, or a grant of probate of a will; all of this can be costly and time-consuming. 

Undertaking a demat account nominee update online may assist in:

• Helping any assets transfer seamlessly to the person intended (the Nominee);
• Reducing the likelihood of family conflict over money claims;
• Reducing the time and money associated with legal processes;
• Providing peace of mind for investors and their families;

It is also important to change the nominee in the demat account periodically if there are events such as marriage, divorce, birth of a child, or loss of a nominee.

Ways to Update Nominee in a Demat Account on Groww

Groww, one of India's best investment platforms, allows additions and changes to the nominee for both CDSL and NSDL accounts. Investors can add a nominee to their demat account either online or offline, depending on their preferences and preparedness for documentation.  

1. Online Process (For CDSL)

The online process for updating the nominee in your demat account is the easiest and would usually take 5-10 minutes. Here's how to process it -  

• Log in to your Groww account with a secure credential.  
• Go to the profile option and select 'Nominee Details.'  
• Select "Add Nominee" or "Update Nominee."  
• Enter the nominee details such as full name, relationship, date of birth, and address.  
• Upload the valid identity proof of the nominee if needed.  
• Finish the process through e-signing with OTP verification using Aadhaar.  

This method is paperless, quick, and only takes a few minutes if the mobile number is linked to Aadhaar.  

2. Offline Process

If you want to process other nominations offline, then you can follow the steps below -  

• Download the nominee form for a demat account from Groww's official website.
• Carefully fill out the form providing the correct details
• You will need to attach a copy of the PAN card and valid ID proof of both the account holder and the nominee.
• Sign the form as per the signature in the KYC records.
• You need to submit the documents at the branch office of Groww or courier them to the address provided.

This traditional process will take a few more days for processing and verification.

Download the nominee form for a demat account from the Groww official website.

Documents Required to Update Nominee

Documents required for updating the records:

• Duly filled nominee form for the demat account (offline only)
• Self-attested copy of PAN card of the account holder
• Aadhaar or any other valid government ID proof of the nominee
• Latest demat account holding statement (for verification purposes, optional)
• Aadhaar-linked mobile number to update online (compulsory)

Also, make sure that documents are current, clear, and also comply with the depository participant's norms.

How Long Does It Take to Update a Nominee?

• Online process - generally instant or done within 24 - 48 business hours.
• Offline process - In most cases, it takes at least 5 to 7 working days (time depends on the broker) from the date of receipt of the physical documents.  

After the verification process, you will receive a confirmation of the successful nominee records update on your registered email and mobile number.

Things to Remember When Updating a Nominee

When updating or adding a nominee, please follow these best practices:

• Check that your nominee's name and date of birth match exactly with their identity proof.
• In most retail situations, only one nominee can be added to each demat account. But if your broker allows you to have multiple nominees, state the share percentage clearly to eliminate confusion.
• Each account holder in a joint demat account must sign the nominee form when making changes.
• You will want to revisit the nominee information as needed. Life happens, and people may get separated, divorced, remarried, with family situations changing, and personal feelings changing regarding whom they want as a nominee in their demat accounts. 
• Without a nominee, your legal heirs will need to go through a lengthy legal process to claim your securities.

Conclusion

Understanding the nominee processes for demat accounts is more than just a compliance requirement; it is also a wise decision. When you have a nominee registered that is valid, it allows your investments to be transferred easily without causing additional stress for your family.

You can use the nominee update to demat account feature online, which is the quickest path to doing so today through the likes of Groww. At the same time, there is also the nominee form that can be submitted offline for those who prefer more traditional methods.

Do remember to add the nominee to the demat account or update it occasionally as required. This simple act of planning can safeguard your family's financial future without any hassles.