Checking and savings accounts can have beneficiaries, but the setup and rules differ between the two

Most banks allow you to name a beneficiary on a savings account, which means that person receives the money in the account when you die. Checking accounts are less straightforward — some banks let you name a beneficiary on a checking account, but many do not. The key difference is that savings accounts are designed to hold money long-term, while checking accounts are meant for regular spending, and banks treat them differently when an account holder passes away.

Whether your bank offers beneficiaries on checking depends on the bank itself. You need to ask your bank directly, because there is no federal rule requiring them to offer this feature. Some large banks like Chase and Bank of America do allow it; others do not. If your bank does not offer beneficiaries on checking, you have other options to make sure the money goes where you want it to go.

Key Takeaways

  • Savings accounts almost always allow you to name a beneficiary; checking accounts vary by bank and you must ask yours directly.
  • A beneficiary on a bank account bypasses probate, meaning the money transfers to that person without going through the court system.
  • You can name a beneficiary by filling out a form at your bank — usually called a "Payable on Death" or POD designation — and it costs nothing.
  • If you do not name a beneficiary, the money in your account becomes part of your estate and goes through probate, which can take months or years.
  • You can change or remove a beneficiary at any time while you are alive, and the beneficiary has no access to the account until you die.

What a beneficiary designation actually does

When you name a beneficiary on a bank account, you are creating what is called a Payable on Death (POD) account, or sometimes a Transfer on Death (TOD) account depending on your bank's language. The beneficiary has zero access to the account while you are alive — they cannot see the balance, make withdrawals, or use the debit card. The account is entirely yours to use.

When you die, the beneficiary contacts the bank with a death certificate and proof of identity, and the bank transfers the money directly to them. This process bypasses probate, which is the court process that normally handles distributing a dead person's money and property. Probate can take six months to two years depending on the state and how complicated the estate is. With a POD beneficiary, the money can move in days or weeks.

The money that goes to a beneficiary through a POD account is not counted as part of your taxable estate for federal tax purposes (though state rules vary). This makes it a simple way to pass money to someone without the cost and delay of probate.

How to name a beneficiary on your account

The process is straightforward and free. Go to your bank branch or call the customer service number on the back of your debit card and ask to add a POD beneficiary to your savings account (or checking account, if your bank offers it). The bank will give you a form to fill out.

On the form, you will provide the beneficiary's full legal name, date of birth, and Social Security number or tax ID. You can name one person or multiple people. If you name multiple beneficiaries, you specify how much each person gets — for example, 50% to your daughter and 50% to your son. Some banks let you name a backup beneficiary in case your first choice dies before you do.

Once you sign the form, the bank files it in your account record. There is no waiting period and no cost. You can change the beneficiary or remove the designation entirely at any time by filling out a new form. The old beneficiary has no say in the change and no way to stop it.

Checking accounts and why they are different

Checking accounts are treated differently from savings accounts because they are meant for active spending, not storage. When someone dies with a checking account, the bank may freeze it immediately to protect against fraud or unauthorized use. This makes it harder for a beneficiary to access the money quickly, even if one is named.

Some banks — including Chase, Bank of America, and Wells Fargo — do allow POD beneficiaries on checking accounts. Others, including some credit unions and smaller regional banks, do not offer this feature at all. If your bank does not, you have two alternatives: you can keep most of your money in a savings account with a beneficiary and use the checking account for monthly bills, or you can set up a joint account with someone you trust.

Before you open a new checking account or assume your current one can have a beneficiary, call your bank and ask. The answer takes one phone call and will save confusion later.

What happens if you do not name a beneficiary

If you die without naming a beneficiary, the money in your account becomes part of your estate. Your estate goes through probate, and a court decides who gets the money based on your will (if you have one) or state law (if you do not). During probate, the account is frozen and the money cannot be touched.

Probate is slow and expensive. Court fees, attorney fees, and the time it takes for the court to process everything can eat into what your family receives. In some states, probate costs 3% to 7% of the estate's value. For a $50,000 account, that could mean $1,500 to $3,500 in costs before your family sees a dime.

Naming a beneficiary avoids all of this. It is the simplest and cheapest way to make sure money in your account goes to the person you choose.

Joint accounts as an alternative to beneficiaries

A joint account is different from a POD beneficiary account. On a joint account, both people own the money equally while both are alive. Either person can withdraw money, make deposits, or close the account. When one owner dies, the money automatically goes to the surviving owner — it does not go through probate.

Joint accounts work well if you want someone to have access to the money while you are alive, such as a spouse or adult child who helps you pay bills. They do not work well if you want to name someone as a beneficiary but do not want them touching the money until you die. A joint account also creates tax complications if the other owner is not a spouse, because the IRS may treat large deposits as a gift.

For most people, a POD beneficiary is simpler and safer than a joint account. You keep full control of the money, and the other person gets it only after you die.

Naming a beneficiary does not replace a will

A POD beneficiary on a bank account is not the same as a will. A will covers everything else you own — your house, your car, your furniture, your retirement accounts. A POD beneficiary covers only that specific bank account. If you have other property or money you want to leave to people, you need a will or a trust.

You can have both. For example, you might name your daughter as the POD beneficiary on your savings account, and in your will you leave your house to your son. They each get what you specified. If you do not have a will and you own property other than bank accounts, that property will go through probate and be distributed according to state law, which may not match what you wanted.

A will is especially important if you have minor children, because a will lets you name a guardian for them. A POD beneficiary designation does neither of those things.

Frequently Asked Questions

Can a beneficiary access my account before I die?

No. A beneficiary has no access to the account while you are alive, even if they know about the designation. Only you can withdraw money, make deposits, or close the account. The beneficiary's rights begin only after you die and they provide the bank with a death certificate.

What if I name someone as a beneficiary and then change my mind?

You can change or remove a beneficiary at any time by contacting your bank and filling out a new form. There is no waiting period and no cost. The old beneficiary cannot stop you or challenge the change. You do not have to tell the beneficiary you are making the change.

Can I name multiple beneficiaries on one account?

Yes. You can name as many beneficiaries as you want and specify what percentage each person gets. For example, you could name three children and give each one 33%. If one beneficiary dies before you do, you can update the form to name someone else, or that person's share can go to the other beneficiaries depending on how you set it up.

Do I have to pay taxes on money I receive as a beneficiary?

No. Money you receive from a POD bank account is not taxable income to you. The account holder's estate may owe federal estate tax if the total estate is very large (over $13.61 million in 2024), but that is separate from the beneficiary receiving the money.

What if my bank does not offer POD beneficiaries on checking accounts?

You can keep most of your money in a savings account with a POD beneficiary and use the checking account for monthly bills. Alternatively, you can set up a joint account with someone you trust, though this gives them access to the money while you are alive. A third option is to include the checking account in your will so it goes through probate like other property.