Gift of movable property

Nominee of the Fixed Deposit will only be the trustee of the money, which the said Nominee/Trustee has to hand over to the real legal heirs.    Nomination is only to ease the process of getting the money from the Bank/Financial institution where the FD is booked.  Without nomination, one has to obtain succession certificate through a Court of law.

Therefore, if your intention is to make the FD proceeds go to the person (whom you want to make a nominee), then the best way is to give a Registered Will bequeathing the FD proceeds to the said person.

You can do that.  Alternatively, you can wait till the FD matures and then given the matured amount as gift to that person.  That situation will not warrant either any WILL or any GIFT.

In any case, If the person to whom you are giving the FD as gift is not your relative, then the person getting the FD as gift may have to pay income tax on the same as though it is income in his/her hand.

IF you can say whether or not that person is related to you, what is the relationship, then it will be possible to say whether there is exemption from Income Tax.

In that case, the grand child being a lenial decendant is a relation and comes under exempted category.  Therefore there will be no incidence of Income Tax on the Gifted amount.