Central

Section 4A of The Government Savings Promotion Act, 1873

Payment on death of depositor.

1[4A. Payment on death of depositor.--(1) If a depositor dies and there is in force at the time of the death of the depositor a nomination in favour of any person, the deposit shall be paid to the nominee.

(2)Where the nominee is a minor, the deposit shall be paid--
1. (a)in any case where a person has been appointed to receive it under sub-section (3) of section 4, to that person; and
2. (b)where there is no such person, to the guardian of the minor for the use of the minor.
(3)Where a deposit is payable to two or more nominees and either or any of them is dead, the deposit shall be paid to the surviving nominee or nominees. 2[(3A) Where the deposit belongs to a minor or to a person of unsound mind who dies and there is no nominee immediately before the date of commencement of Part I of Chapter VIII of the Finance Act, 2018, the deposit shall be paid to the guardian.]
(4)If a depositor dies and there is no nomination in force at the time of his death and probate of his will or letters of administration of his estate or a succession certificate granted under the Indian Succession Act, 1925 (39 of 1925), is not within three months of the death of the depositor produced to the 3[Authorised Officer of the Government Savings Bank in which the deposit is, then--
1. (a)if the deposit does not exceed 4[such limit as may be prescribed] the 3[Authorised Officer] may pay the same to any person appearing to him to be entitled to receive it or to administer the estate of the 5[deceased in accordance with such procedure as may be prescribed.] 6* * * * * 7* * * * *]

Summary

When a depositor dies and had named a nominee, the bank pays the money to that nominee.
If the nominee is a child (a minor), the money is paid to the person the depositor chose specifically to receive it for the child under Section 4(3), or if no one was chosen, to the child's guardian.
If there are multiple nominees and one dies, the surviving nominees receive the payment.
If a minor or person of unsound mind died before April 2018 without a nominee, the money goes to their guardian.
If there is no nominee and no legal papers (like a will or succession certificate) are shown within three months, the Authorised Officer can pay the money to whoever seems entitled to it, provided the amount is below a prescribed limit.

Practical examples

1Ramesh died on June 1, 2025, leaving Rs 50,000 in a savings account. He had named his sister, Aditi, as his nominee. Under this section, the bank pays the full amount to Aditi immediately upon proof of death.

2Sunita died in August 2025 with Rs 10,000 in her account but left no nominee. Her family did not produce a will or certificate for four months. Since the amount was small and the three month period passed, the bank officer paid the money to her husband, Rajesh, who appeared to be the rightful person to manage her estate.

3Vijay named his 8 year old son, Arjun, as nominee. Vijay did not appoint a special receiver under Section 4(3). When Vijay died on March 12, 2026, the bank paid the money to Arjun's mother, Priya, who is his legal guardian.

FAQ

1. What happens if I have two nominees and one of them passes away before I do?

According to Section 4A, if one of your nominees dies, the bank will pay the full deposit to the surviving nominee or nominees after your death.

2. How long must my family wait to get money if I did not name a nominee?

They must wait at least three months. If they do not produce legal documents like a probate or succession certificate in that time, the Authorised Officer can decide to pay someone who seems entitled to it, as long as the amount is within the allowed limit.

3. Who gets the money if the nominee is a minor?

The payment goes to the person you specifically appointed to handle it for the child under Section 4(3). If you did not appoint anyone, it goes to the child's guardian.

4. Does the Authorised Officer have to follow a specific procedure when paying out money without a nomination?

Yes, if the amount is within the prescribed limit, the officer must follow the specific procedures set by the government for these cases.

Test yourself

Q1.Under Section 4A of The Government Savings Promotion Act, 1873, what is the required waiting period before an Authorised Officer can pay out a deposit that has no nomination and no legal certificate?

Q2.Under Section 4A of The Government Savings Promotion Act, 1873, who is the payment made to if the nominee is a minor and no receiver was appointed under Section 4(3)?

Q3.Under Section 4A of The Government Savings Promotion Act, 1873, what happens if a depositor has three nominees and one of them dies before the depositor?

Q4.Under Section 4A of The Government Savings Promotion Act, 1873, an Authorised Officer can only pay out a deposit without a nomination or legal certificate if the amount is:

Q5.Under Section 4A of The Government Savings Promotion Act, 1873, if a person was appointed by the depositor specifically to receive money for a minor nominee (under Section 4(3)), who gets the payment?

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