Either-or-Survivor Account

An Either-or-Survivor Account is a type of joint bank account commonly offered by banks in India, particularly suited for individuals seeking operational flexibility and continuity in account management. Under this arrangement, either of the joint account holders can independently operate the account during their lifetime, and upon the death of one holder, the surviving account holder gains full rights to operate the account. In the context of banking, finance, and the Indian economy, this account structure plays an important role in household financial management, succession planning, and financial inclusion.

Concept and Meaning of an Either-or-Survivor Account

An Either-or-Survivor Account allows two or more individuals to jointly hold a bank account with clearly defined operating instructions. The term “either” signifies that any one of the account holders can operate the account independently, while “survivor” implies that in the event of the death of one holder, the surviving holder can continue to operate the account without legal or procedural disruption.
This form of account is particularly popular among spouses and close family members. It provides convenience, liquidity, and certainty of access to funds, which are critical aspects of personal finance and risk management.

Regulatory Framework and Banking Practice in India

Either-or-Survivor Accounts in India are governed by banking regulations and operational guidelines issued by the Reserve Bank of India. Banks are required to obtain explicit consent from all joint account holders regarding the mode of operation at the time of account opening.
The Reserve Bank of India has emphasised that banks must honour the operational mandate agreed upon by the account holders. In the case of an Either-or-Survivor Account, banks are permitted to allow the surviving account holder to access and operate the account balance without insisting on succession certificates or probate, provided the mandate is clear and there are no disputes.

Operational Features of Either-or-Survivor Accounts

Either-or-Survivor Accounts are designed to offer simplicity and ease of operation. Any one of the account holders can deposit or withdraw funds, issue cheques, or conduct electronic transactions independently. The consent of the other holder is not required for routine operations.
Upon the death of one account holder, the surviving holder is allowed to continue operating the account or close it, as per their preference. The balance in the account becomes payable to the survivor, subject to applicable legal provisions. This feature ensures uninterrupted access to funds, which is particularly important during emergencies or periods of financial stress.

Importance in Personal Finance and Wealth Management

From a personal finance perspective, Either-or-Survivor Accounts are an effective tool for liquidity management and estate planning. They ensure that family members are not denied access to funds due to procedural delays after the death of an account holder.
In Indian households, where joint financial management is common, such accounts help reduce dependency on legal processes for small and routine financial needs. They also complement other financial instruments such as nominations, wills, and insurance policies in ensuring smooth wealth transmission.

Role in Banking and Financial Services

For banks, Either-or-Survivor Accounts simplify account operations and reduce administrative burden related to deceased customer claims. Clear operating instructions minimise disputes and enhance customer satisfaction. These accounts are widely used for savings accounts, fixed deposits, and recurring deposits.
In fixed deposits held under the Either-or-Survivor mandate, banks allow premature withdrawal or renewal by either holder during their lifetime and by the survivor thereafter. This operational clarity supports efficient service delivery and strengthens trust in the banking system.

Legal and Succession Implications

While an Either-or-Survivor Account provides operational convenience, it does not override succession laws. The surviving account holder receives the funds as per the banking mandate, but they may still be required to distribute the funds among legal heirs in accordance with applicable inheritance laws.
This distinction is important in the Indian legal context, as joint account operation does not automatically confer absolute ownership. Understanding this nuance helps avoid disputes and ensures that account holders use Either-or-Survivor Accounts appropriately as part of broader estate planning.

Significance for Financial Inclusion and the Indian Economy

Either-or-Survivor Accounts contribute to financial inclusion by making banking services more accessible and user-friendly. They encourage joint participation in formal banking, especially among elderly individuals, homemakers, and dependants who may otherwise face barriers in accessing funds.
At a macroeconomic level, such account structures enhance trust in the banking system and promote savings mobilisation. By ensuring continuity of access to deposits, Either-or-Survivor Accounts support financial stability and efficient flow of funds within the economy.

Challenges and Limitations

Despite their advantages, Either-or-Survivor Accounts may give rise to disputes if family relationships deteriorate or if there is ambiguity regarding ownership of funds. In cases where large balances are involved, lack of clarity in estate planning can lead to legal conflicts among heirs.
Banks must therefore ensure that customers are adequately informed about the legal implications of joint accounts and are encouraged to complement them with nominations and clear succession planning instruments.