Archive · 18 Nov 2025
Lock-in Periods for Investments After Holder's Death
When someone dies, their investments might still have lock-in periods.
This means the person who gets the investment (the nominee) might have to wait before they can use the money.
This depends on the type of investment.
Some investments, like bank fixed deposits and postal small savings, can be withdrawn early without any penalty.
But others, like some mutual funds and RBI bonds, might still have a lock-in period that needs to be served.
Investments in mutual funds and bonds may have lock-in periods even after the holder's death
ELSS funds have a 3-year lock-in, but nominees can redeem after 1 year from the original allotment date
RBI bonds and some mutual funds require serving the remaining lock-in period before redemption
Bank FDs and SCSS allow early liquidation without penalty upon death
Postal small savings schemes like PPF and KVP can be withdrawn by nominees without serving the lock-in period
- Who
- Investors and their nominees/legal heirs
- What
- Face lock-in periods on investments after the investor's death
- When
- Upon the death of the investor
- Where
- Applicable to various types of investments like mutual funds, bank FDs, RBI bonds, etc.
- Why
- To ensure funds are used for intended purposes and to manage risks
- ELSS Lock-in
- 3 years, but nominees can redeem after 1 year from original allotment
- RBI Bonds Lock-in
- Until maturity, even after the holder's death
- Bank FDs Lock-in
- No mandatory lock-in for nominees upon death
- SCSS Lock-in
- Waived off upon death of the account holder
- Postal Small Savings Lock-in
- No lock-in for nominees upon death