While opening a bank account, a demat account or any money related account, you would come across two words – nominee and guardian.
Often, it would be confusing if you don’t know the exact meaning (as in banking) of these two words.
So let’s see the meaning of nominee and a guardian!
A nominee is a person designated by the account holder to receive the assets or funds in the event of the account holder’s death. A nominee is typically named for financial assets such as bank accounts, insurance policies, and mutual funds.
The nominee serves as a trustee for the assets and is responsible for distributing them to the rightful heirs of the account holder.
A guardian, on the other hand, is a person appointed by the court to take care of the well-being and interests of a minor or an individual who is unable to take care of themselves due to incapacitation. This can include making decisions about the individual’s education, healthcare, and overall welfare.
Guardianship can also be established for the purpose of managing the financial affairs of the individual.
In summary, a nominee is a person designated to receive the assets in case of death, where as a Guardian is a person appointed by court to take care of the well-being and interests of a minor or an individual who is unable to take care of themselves.