Unclaimed deposits: How heirs can trace and claim the money from banks | Personal Finance
Unclaimed deposits in the Depositor Education and Awareness (DEA) Fund have risen. The finance ministry told the Rajya Sabha recently that the amount increased from ₹90,545 crore on June 30, 2025, to ₹98,073 crore on January 31, 2026.
For families, an old bank account or fixed deposit can easily remain undiscovered after the depositor’s death. Understanding when an account becomes unclaimed, how to trace it, and what documents banks require can make recovery easier.
Know when deposits become unclaimed
A savings or current account with no customer-induced transaction for more than 24 months is classified as inoperative or dormant. At this stage, the money remains with the bank and continues to earn interest.
An inoperative account can be reactivated free of charge after fresh KYC through a branch or video-KYC.
A credit balance in a savings or current account becomes unclaimed after 10 years without a customer-induced transaction. A term deposit follows a different clock. “A term deposit becomes unclaimed if it is not claimed for 10 years from its maturity date rather than from the date it was booked,” says Prashant Mishra, founder and chief executive officer (CEO), Agnam Advisors.
Bank-generated entries, such as interest credits or service charges, do not reset the 10-year clock.
“An account becomes unclaimed when someone forgets about an old account or when a depositor dies without the family knowing about it,” says Adhil Shetty, CEO, BankBazaar.
After 10 years of continuous inactivity or unclaimed status, the bank identifies the account and the funds for transfer to the DEA Fund. “The bank must transfer the eligible account and amount on the last working day of the month following completion of 10 years of continuous inactivity or unclaimed status,” says Rajat Dutta, founder and initiator, Inheritance Needs Services.
Claim remains alive
The transfer changes where the money is held, but not its ownership. “Transfer to the DEA Fund does not take away the depositor’s right to claim the money,” says Shetty.
After the transfer, the Reserve Bank of India (RBI) acts as custodian of the unclaimed deposits lying in the DEA Fund. “It uses amounts in the Fund for depositor awareness and educational programmes,” says Dutta.
The original bank, however, continues to maintain the customer records and remains the point of contact for a future claim.
“The depositor or legal heir can make a claim at any time after the transfer. The bank pays the claimant first and then reclaims the amount from RBI,” says Mishra.
Eligible interest-bearing deposits continue to earn interest even after they are transferred to the DEA Fund. Such deposits earn simple interest at 3 per cent per annum from May 11, 2021. A rightful owner or legal heir receives the unclaimed amount along with simple interest.
Non-interest-bearing balances, such as current accounts and unpaid drafts, do not earn interest in the Fund.
How to search on UDGAM
RBI’s UDGAM portal allows heirs and beneficiaries to search for dormant or unclaimed bank accounts and deposits across multiple financial institutions at one place.
Users must first register, create a user ID and password, and log in. They can then open the Search for Unclaimed Deposits screen. For an individual account, the search should be carried out through the Individual tab using the primary or secondary account holder’s name as recorded by the bank.
“The user can select one bank, multiple banks or all banks for the search,” says Dutta.
The search process can ask for the account holder’s name, bank name, address and state or Union Territory. “The portal checks its database and provides a response based on the details entered,” says Dutta.
Users should try variants of the account holder’s name, including initials, expanded names and spellings used in old records.
Around 30 banks, accounting for about 90 per cent of the DEA Fund by value, are available on UDGAM. “Deposits with banks not available on UDGAM must be traced directly with the bank concerned,” says Mishra.
Approach the bank after a match
Once a successful search result appears, download it in portable document format (PDF). The result identifies the bank and directs the claimant to its claim and settlement procedure.
The heir must approach the bank, not the RBI, because the RBI does not settle individual claims directly. The bank pays the claimant and subsequently seeks reimbursement from the DEA Fund.
“The exact balance is confirmed by the bank rather than by the search result. The subsequent process is handled offline at the branch where the account was held,” says Mishra.
If the depositor is alive, fresh know-your-customer (KYC) formalities are completed and the account is reactivated. If the depositor has died, the matter becomes a deceased-claim settlement.
Nomination simplifies settlement
A registered nominee usually makes the settlement process much simpler.
Under Section 45ZA of the Banking Regulation Act, 1949, the nominee acquires the rights of the depositor vis-à-vis the deposit, to the exclusion of others, for payment by the bank.
“The bank must not insist that a nominee produce a succession certificate, letters of administration or probate, or seek an indemnity or surety from the nominee, irrespective of the amount in the deceased account,” says Anjali Jhawar, advocate, D.M. Harish & Co.
“The bank typically requires the death certificate and the nominee’s KYC documents before releasing the funds,” says Shweta Tungare, co-founder, LawTarazoo.
Nomination, however, should not be confused with ultimate beneficial ownership. The nominee does not automatically become the beneficial owner of the money and instead acts as trustee or custodian for the rightful legal heirs.
“The nominee is required to distribute the funds in accordance with the deceased’s will or applicable succession laws,” says Tungare.
No nominee means more paperwork
A simplified settlement procedure can apply when the account has no nominee or survivorship clause and the deceased did not leave a will.
“It also requires that there be no contesting claim or known court order restraining payment,” says Jhawar.
Claims up to the applicable threshold limit can then be settled on the basis of prescribed documents.
“Under the simplified procedure for eligible claims without a nominee or survivorship clause, the bank may seek a claim form, a death certificate, and an indemnity bond,” says Jhawar.
“For smaller claim amounts, banks may also seek an affidavit from the heirs. They may also accept a simple family letter,” says Tungare.
Higher-value claims can require more formal proof of succession. “Claims above the threshold limit are settled based on a succession certificate or legal-heir certificate issued by a competent authority,” says Jhawar.
The bank may also ask for the other documents prescribed under the simplified procedure.
Disputes among heirs increase the documentation burden. “For disputed claims, banks may insist on a legal-heir certificate or succession certificate,” says Tungare.
A legal-heir certificate may be obtained from the revenue authorities to establish inheritance, while a succession certificate may be obtained from a civil court to safeguard the bank against rival claims.
Court documents may be needed
High-value estates or complicated family situations can require court intervention.
“If the deceased left a Will, the bank may require a probate—a court seal authenticating the Will’s validity,” says Tungare.
Where the deceased died intestate and left substantial unclaimed deposits, the heirs are likely to need letters of administration.
“This court order officially appoints an administrator, granting them the legal authority to manage and distribute the deceased’s bank balances to the rightful heirs,” says Tungare.
The writer is a Mumbai-based independent journalist
