Quick answer: When an NRE, NRO or FCNR account holder dies, the bank normally pays a surviving joint holder or the registered nominee. But a nominee is generally treated as receiving the money on behalf of the legal heirs or will beneficiaries, not as the final owner. A will that lists each account by bank and branch tells everyone who should ultimately receive it and makes disputes less likely.
Key takeaways
- Register a nominee on every account — it speeds up the bank's payout.
- Use your will to say who ultimately owns the money; keep nominee and will consistent where possible.
- Describe accounts by bank, branch and account type; don't write full account numbers in shared drafts.
- Non-resident heirs typically receive funds into an NRO account; repatriation of inherited funds is generally permitted up to USD 1 million per financial year, subject to tax paperwork.
How each account type is handled
The account type affects what heirs abroad can do with the money.
| Account | What it holds | On death (typical) |
|---|---|---|
| NRE | Foreign earnings, repatriable | Paid to joint holder/nominee; heirs abroad can usually repatriate |
| NRO | Indian income (rent, dividends) | Paid to joint holder/nominee; repatriation within RBI limits with CA certificates (Form 15CA/15CB) |
| FCNR(B) | Foreign-currency deposit | Can often be paid in foreign currency to non-resident heirs |
Nominee vs beneficiary
Nomination lets the bank obtain a valid discharge by paying the nominee. Courts have generally treated nominees of bank deposits as custodians for the legal heirs rather than absolute owners. If your will leaves the account to someone other than the nominee, the nominee may be obliged to pass it on.
To avoid friction, many people make the nominee the same person the will names — or name the executor as nominee to collect and distribute.
Common mistake
Naming a parent as nominee years ago and never updating it after marriage or children. Review nominations when you make your will.
What US-resident heirs need
Typically: death certificate (apostilled if issued in the US), the will or succession proof, heir KYC and passport, and an NRO account to receive funds. For repatriation, banks commonly ask for a chartered accountant's certificate and tax forms. Check your bank's current checklist.
Frequently asked questions
- Does a joint holder automatically own the account?
- Under an 'either or survivor' mandate the bank pays the survivor, but ownership questions between the survivor and heirs can still arise. Your will helps clarify intent.
- Should I write account numbers in my will?
- Identifying the bank, branch and account type is usually enough. Some people add the last four digits.
- Can my US-citizen child inherit my NRE account?
- Yes. Inheritance by a person resident outside India is generally permitted; the funds are usually credited to the heir's NRO or NRE account depending on source.