How to claim bonds and debentures after the holder dies

Start with the interest credits on the bank statement. Bonds pay interest annually or half-yearly, and the narration usually names the issuer, which is enough to find the registrar.

Check the demat statement, which will list bonds and debentures held electronically alongside shares.

For older physical holdings, look for allotment letters and bond certificates. Tax-free bonds issued a decade or more ago are a common find and often forgotten, because the interest is small relative to the principal.

RBI savings bonds and government securities held through RBI Retail Direct work differently again: the account carries its own nomination, and on the holder's death the registered nominee has the right to the investments and to receive the interest and amounts due. Where the nominee is a minor, the holder will have appointed a guardian to receive on their behalf. These are claimed through the Retail Direct account or the receiving bank, not a company registrar.

The process is identical to the transmission of shares: the claimant needs their own demat account, the deceased holder's name is deleted where the holding was joint, and the nominee or legal heirs claim where it was single.

Our shares and demat guide sets out the documentation in full, and the same forms cover bonds held in the same account.

Write to the issuer's registrar with a transmission request. The registrar will specify its documentation, which follows the familiar pattern of death certificate, claimant identity and bank details, and either a nomination on record or succession documentation.

The registrar will usually also want the interest payment mandate updated, so that future interest goes to the claimant's account rather than the deceased holder's frozen one. Do this in the same letter — it is easy to complete the transmission and then find interest still being credited to a dead account.

Where a certificate is lost, a duplicate can be issued, with the usual indemnity and advertisement requirements. Note too that since January 2022 securities issued on an investor service request — transmission included — must be issued in demat form, so a physical holding is dematerialised on the way through.

Bonds that matured before the holder died, and whose redemption proceeds were never collected, are a distinct problem: the money sits with the issuer or has been transferred onwards under the rules for unclaimed amounts.

Ask the registrar explicitly whether any holding has matured and gone unclaimed. Companies hold unclaimed amounts — dividends, deposits, debenture money — for seven years and then transfer them to the Investor Education and Protection Fund, from which they are reclaimed by filing Form IEPF-5, exactly as with shares.

A claimant can usually continue to hold the bonds and receive the interest. Older bonds — particularly tax-free bonds issued when rates were higher — often carry a better return than anything currently available, and selling them to "close everything" can be an expensive tidiness.

The transmission itself is not taxable — succession and inheritance are excluded from what counts as a transfer, and India has no inheritance tax. Interest received after the transmission is the claimant's income and taxed accordingly, apart from instruments where the interest itself is exempt. Establish which you are holding before deciding.