The maturity proceeds of unclaimed bank fixed deposits earn the savings bank rate of interest starting from the date of maturity
Just days back it was revealed that as much as Rs 11,302 crore lies unclaimed in bank accounts. Separately, different studies have shown that Rs 12,000 crore in insurance and about Rs 500 crore in mutual funds (MF) are unclaimed. Forgotten documents may hold the key to you getting rich. DNA Money spoke to different experts to understand the process of reclaiming such money, documents required and other nitty-gritties.
Bank on it
Banks publish a list of inactive or inoperative accounts for 10 years or more on their website. The first step is to check the inactive account details. Next, if you are the account holder, submit the unclaimed deposit claim form along with a valid identity and address proof.
"If you are the legal heir, you will need to submit the death certificate along with the unclaimed deposits claim form and identity and address proof. Note that you will need to provide the originals to the bank for scrutiny," says Navin Chandani, chief business development officer, Bankbazaar.
Then, the bank will review the claim. Once approved, it will follow the usual claim settlement process.
"In case the account holder is deceased and there is no nominee, then you will have to submit documents that prove that you are the sole legal heir," says Chandani.
The maturity proceeds of unclaimed bank fixed deposits (FD) earn the savings bank (SB) rate of interest starting from the date of maturity. The interest on savings bank accounts is credited irrespective of whether the bank account is operative or dormant. "But if these are not claimed for 10 years or more, then this money would be transferred to the Depositor Education and Awareness Fund (DEAF) according to a Reserve Bank of India (RBI) mandate," he adds.
Nevertheless, account holders can still claim the money even after it has been transferred to DEAF.
Getting the cover
In case of insurance, the unclaimed amount can be death claim, maturity claim, survival benefits, premiums refunds or health insurance or motor insurance claim.
Similar to the banks, any insurance company whether life/general/health needs to state the unclaimed amount of policyholders in their database, mainly on the website. Any person claiming the amount can go through the database and check his/her details. If the details are mentioned in the database, simply fill the request form with necessary documents to claim that amount.
Vaidyanathan Ramani, head product, and innovation, Policybazaar.com says the essential documents are your identity card to prove that amount belongs to you, policy document and cancelled cheque.
If the insurance company still has the unclaimed money after 10 years, there is an IRDAI regulation on the same. All insurers having unclaimed amounts of policyholders for a period of more than 10 years, need to transfer the same to the Senior Citizen’Welfare Fund (SCWF).
Ramani points out that a person can claim the unclaimed money up to 25 years from the date of transferring the amount to SCWF.
Mutual Funds (MF)
In case of MFs, the unclaimed money usually occurs when a redemption amount or dividend paid by the asset management company (AMC) doesn’t get credited to underlying account due to several reasons like change in address of the investor, name mismatch in the bank account and AMC’s record etc.
Dinesh Rohira, founder & CEO,5nance.com says that an investor can claim their unclaimed funds after submitting a duly filled ‘unclaimed redemption/dividend claim form’ along with updated bank details to AMC. It is mandatory for AMCs to provide unclaimed investment details on their websites.
An investor can put her/his folio number or through the registrar by providing details like PAN and email id, mobile number, or bank details, adds Rohira. Investors will have to file the application along with updated bank details by providing the recent three-months bank statement or a personalized cancelled cheque.
If an investor makes a claim within three years from due date of redemption or dividend, the investor is eligible to receive initial unclaimed amount along with income earned on it during this period.
"If an investor claims after three years, the eligibility is to receive initial unclaimed amount along with income earned until the end of the third year. However, income earned on the unclaimed money after the third years shall be transferred to Investor’s Education and Protection Fund (IEPF) which is used for financial awareness. Once it is transferred to IEPF, it cannot be redeemed or claimed," warns Rohira.
HIDDEN WEALTH
- The maturity proceeds of unclaimed bank fixed deposits earn the savings bank rate of interest starting from the date of maturity
- All insurers having unclaimed amounts of policyholders for a period of more than 10 years, need to transfer the same to the SCWF
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