What a POD account is and why you might want one
A Payable on Death (POD) account is a bank account—checking, savings, or money market—that passes directly to a person you name when you die, without going through probate. The money skips the court process entirely and goes straight to whoever you designate, which is faster and costs nothing.
You keep full control of the account while you're alive. You can spend the money, change the beneficiary, or close the account whenever you want. The POD designation only takes effect after you die. If your beneficiary dies before you do, the money goes back into your estate unless you've named a backup beneficiary.
POD accounts are useful if you want to leave money to a specific person without the delay and expense of probate, or if you want to keep that money separate from the rest of your estate. They work alongside a will, not instead of one.
Key Takeaways
- You set up a POD account by naming a beneficiary at your bank—most banks let you do this online, by phone, or in person.
- The account remains yours to use and control until you die; the beneficiary has no access while you're alive.
- If you die, the money passes to your named beneficiary outside of probate, usually within days or weeks.
- You can change or remove the beneficiary at any time, and you can name a backup beneficiary in case your first choice dies before you do.
- POD accounts are free to set up and have no ongoing fees beyond what your bank normally charges for that account type.
How to add a POD beneficiary to an existing account
If you already have a checking or savings account at your bank, you can add a POD designation without opening a new account. Call your bank's customer service line, visit a branch in person, or log into your online banking portal—most banks now offer this option in the account settings menu.
You'll need to provide the beneficiary's full legal name and, depending on your bank, their Social Security number or date of birth. Some banks ask for their address as well. Write down the exact name as it appears on their ID or Social Security card; a nickname or slight misspelling can cause problems later.
The bank will confirm the change in writing, usually by mail or email. Keep that confirmation. It's your proof that the POD is in place. If you set it up online or by phone, ask the bank to send you a written record; don't rely on a screenshot alone.
Setting up a new POD account from scratch
If you want to open a new account specifically as a POD account, start by choosing your bank and account type—checking, savings, or money market. You can do this in person at a branch or online through the bank's website.
During the account opening process, you'll see a field for beneficiary information. Fill in your beneficiary's full legal name and the identifying information your bank requires. Some banks let you name multiple beneficiaries and split the money between them; others require you to name one primary beneficiary and one contingent (backup) beneficiary.
You'll need to fund the account with an opening deposit, which varies by bank—typically $25 to $100 for savings accounts, sometimes more for money market accounts. After that, the account works like any other account you own.
Naming a backup beneficiary and what happens if they die first
Most banks let you name a contingent beneficiary, also called a secondary or backup beneficiary. This person receives the money if your primary beneficiary dies before you do. If you don't name a contingent beneficiary and your primary beneficiary dies first, the money becomes part of your estate and goes through probate.
To add a contingent beneficiary, use the same method you used to set up the primary one—call the bank, visit a branch, or log into online banking. You can usually add or change the contingent beneficiary anytime, just like the primary one.
If both your primary and contingent beneficiaries die before you, the account money goes into your estate. That's why it's worth naming at least a backup, even if it's just a charity or a distant relative. You can always change it later.
Changing or removing a POD beneficiary
You can change your POD beneficiary at any time while you're alive. Call your bank, go to a branch, or use online banking to update the designation. The bank will ask you to confirm the change and will send you written confirmation.
If you want to remove the POD designation entirely and have the money go through probate instead, you can do that too—just ask the bank to delete the beneficiary information. This is rare, but it's your choice.
Keep in mind that if you're married and your state has community property laws, your spouse may have rights to the account even if they're not named as beneficiary. Check your state's rules or ask your bank if you're unsure.
What happens to the account after you die
When you die, your beneficiary should notify the bank and provide a death certificate. The bank will verify the beneficiary's identity and transfer the money to them. This usually takes a few days to a few weeks, depending on the bank and how quickly the beneficiary contacts them.
The beneficiary does not need to go to court or file any paperwork with the probate system. The bank handles the transfer directly. The money is not subject to your debts or taxes owed by your estate, though the beneficiary may owe income tax on any interest the account earned after your death.
If the account is very large, the beneficiary should keep the death certificate and the bank's transfer records for their tax records. A CPA or tax preparer can advise on whether the inherited money is taxable.
POD accounts versus other ways to pass money to someone
POD accounts are one tool among several. A joint account with right of survivorship passes to the other owner automatically, but it gives that person access to your money while you're alive. A trust can hold multiple assets and gives you more control over how money is used after you die, but it costs money to set up and maintain. A will lets you leave money to anyone, but it goes through probate, which takes months and costs fees.
POD accounts are fastest and cheapest if you want to leave money to one or two people. They work well alongside a will for money you want to pass quickly. If you have a large estate, multiple beneficiaries, or complex wishes about how money should be used, a trust or will might be better. You can use both—a POD account for quick transfer and a will for everything else.
Frequently Asked Questions
Can my beneficiary access the money in a POD account while I'm alive?
No. The beneficiary has no rights to the account until you die. You have complete control and can spend, move, or close the account anytime. The beneficiary's name on the account means nothing until your death certificate is presented to the bank.
Do I need a will if I have a POD account?
A POD account and a will serve different purposes. The POD passes that specific account outside probate. A will covers everything else you own and lets you name a guardian for minor children. Most people benefit from having both.
What if I name my minor child as beneficiary?
The money will go to your child when you die, but a minor cannot legally control a bank account. The bank will likely hold the money in trust or require a court-appointed guardian to manage it until the child turns 18 or 21, depending on your state. Ask your bank about their policy before naming a minor.
Can I have a POD account at more than one bank?
Yes. You can set up POD accounts at multiple banks and name different beneficiaries for each one if you want. Each account is separate and passes independently when you die.
Is there a cost to set up or maintain a POD account?
No. Setting up a POD designation is free. You pay only the regular fees your bank charges for that account type—monthly maintenance fees, overdraft fees, and so on. The POD feature itself adds nothing to the cost.