What is the inactivity alert?
The nominee in your Demat account will be alerted if there is prolonged inactivity in your account. Suppose the account is not used for more than 365 days. In that case, regulations stipulate that the account is to be marked dormant to avoid fraudulent account usage. A re-KYC activity is to be undertaken to continue using the account. Suppose the re-KYC activity is not done within 30 days by the account holder, Zerodha will trigger an alert to the nominee.
Why set this up?
We work hard to build up a portfolio over time, and in our absence, we would like someone we care for to benefit from the investments made. The best way to keep them informed is to include them while taking up investment decisions, creating an FD, having a Demat account with securities, etc. We miss doing this most of the time, and the investments remain in the Demat account, and the account gets marked as inactive over time. We figured it's best to notify the nominee in case of prolonged inactivity in your account.