In banking, a nominee is a person you designate to receive your bank deposits, investments, or insurance proceeds in the event of your death. It is like naming a caretaker for your money — the nominee can claim the funds without going through lengthy legal processes.
Important distinction: a nominee is a custodian, not an owner. In India, for example, the nominee receives the money on behalf of the legal heirs. If the deceased had a will, the will overrides the nomination. The nominee's job is to collect the funds and hand them over to the rightful heirs.
Every bank account, fixed deposit, mutual fund, and insurance policy allows you to name a nominee. Not naming one creates massive headaches — your family may need to obtain a succession certificate or court order to access the funds, which can take months or even years.