A POD account is a checking account with a named beneficiary who receives the money if you die
POD stands for "Payable on Death." It is a feature you can add to a checking account (or savings account) that names someone to inherit the money in that account automatically when you pass away. The beneficiary does not own the account while you are alive—you do. They only receive the funds after your death, and the transfer happens outside of your will or probate court.
The main reason people use POD accounts is speed and simplicity. When you die, your beneficiary can usually claim the money within days or weeks by presenting a death certificate to the bank. They do not have to wait for a will to be read in court or for an estate to be settled, which can take months or years. The account bypasses probate entirely.
POD accounts are also called "Totten trusts" in legal terms, though most banks simply call them POD accounts on their paperwork.
Key Takeaways
- A POD checking account names a beneficiary who inherits the money only after you die, while you retain full control during your lifetime.
- The money transfers directly to the beneficiary outside of probate, meaning no court involvement and faster access to the funds.
- You can name one or more beneficiaries, and you can change or remove the POD designation at any time while you are alive.
- Most banks offer POD features at no extra cost, though you should confirm this when you open the account.
- A POD account is different from a joint account—the beneficiary has no access to the money or account statements while you are living.
How a POD account works during your lifetime
While you are alive, a POD checking account works exactly like any other checking account. You deposit money, write checks, use a debit card, set up automatic payments, and earn interest (if the account offers it). The beneficiary you named has no access to the account, cannot see the balance, and cannot withdraw money. You have complete control.
You can also change your mind at any time. If you want to name a different beneficiary, remove the POD designation entirely, or add a second beneficiary, you simply contact your bank and update the paperwork. There is no penalty for changing it, and the change takes effect immediately.
The money in the account is yours to spend. If you withdraw all the funds before you die, there is nothing left for the beneficiary to inherit. That is your choice to make.
What happens to the account after you die
When you pass away, the beneficiary you named can contact the bank with a death certificate and claim the money. The bank will verify the death certificate and transfer the funds to the beneficiary's own account or issue a check. This process typically takes one to three weeks, depending on the bank.
The money does not go through your will or estate. It does not get divided among your heirs according to state law. It goes directly to the person or people you named on the POD form, in the percentages you specified. If you named two beneficiaries at 50% each, they each receive half.
If your named beneficiary dies before you do, the money goes back into your estate and is handled according to your will or state law. This is why some people name a backup beneficiary (called a contingent beneficiary) on the POD form.
POD accounts versus joint accounts
A POD account and a joint account look similar on the surface, but they work very differently. In a joint account, both people own the account right now and can access the money immediately. In a POD account, only you own it while you are alive, and the beneficiary cannot touch it until after you die.
This matters for taxes and creditors. If you add someone as a joint owner, they may be responsible for taxes on the account's interest income. If someone sues you, they might be able to reach a joint account. A POD account avoids both problems—the beneficiary has no legal claim to the money until you die, so creditors cannot touch it and the beneficiary does not owe taxes on it while you are living.
Joint accounts also create a different kind of risk: if the joint owner gets sued, a creditor might be able to freeze or seize the entire account, even the part that is yours. A POD account does not have this problem.
Naming beneficiaries and changing them
When you open a POD checking account, the bank will ask you to fill out a form naming your beneficiary. You can name one person, multiple people, or even an organization like a charity. If you name more than one, you specify what percentage each person receives.
You can also name a contingent (backup) beneficiary. If your primary beneficiary dies before you do, the money goes to the contingent beneficiary instead. This prevents the money from going into your estate if your first choice is no longer alive.
Changing your beneficiary is simple. Contact your bank, ask for a new POD form, fill it out with the new name, and sign it. The change takes effect once the bank processes it. You do not need permission from the old beneficiary or anyone else.
Taxes and the POD account
While you are alive, you pay taxes on any interest the account earns, just as you would with a regular checking account. The beneficiary does not owe income tax on the money they inherit—inheritances are generally not taxable income at the federal level.
However, if the account is very large, it might be part of your taxable estate for estate tax purposes. This only matters if your total estate exceeds the federal estate tax threshold, which changes yearly and is quite high (over $13 million in recent years). Most people do not need to worry about this.
Your beneficiary should keep the death certificate and the bank's transfer paperwork for their records, in case questions come up later about where the money came from.
Costs and where to set up a POD account
Most banks offer POD designations at no extra cost. It is simply a form you fill out when you open the account or add to an existing account. Some banks may charge a small fee to update the designation if you change it multiple times, but this is rare.
You can add a POD designation to a checking account at almost any bank—national banks, credit unions, online banks, and local community banks all offer this feature. When you open an account or call your current bank, ask whether they support POD accounts and what the process is. It usually takes just a few minutes.
If you already have a checking account without a POD designation, you can almost always add one by contacting your bank and requesting the form. There is no need to close the account or move your money.
Frequently Asked Questions
Can I name more than one beneficiary on a POD account?
Yes. You can name multiple beneficiaries and specify what percentage each one receives. For example, you could name your two children at 50% each, or three grandchildren at 33% each. The bank will distribute the money according to those percentages after you die.
What if I name someone as a POD beneficiary and then we get divorced?
The POD designation does not automatically change when you divorce. You will need to contact your bank and update the form yourself to name a different beneficiary. Some states have laws that remove a spouse as a beneficiary automatically upon divorce, but not all do, so it is safest to update it yourself.
Can the beneficiary see my account balance or statements while I'm alive?
No. The beneficiary has no access to the account, no right to see statements, and no legal claim to the money until after you die. Only you can access the account and see what is in it.
What happens if I die without naming a beneficiary?
If you do not name a POD beneficiary, the account is treated as part of your estate and goes through probate. The money will be distributed according to your will or, if you do not have a will, according to your state's inheritance laws.
Can I remove the POD designation and just have a regular checking account?
Yes. Contact your bank and ask them to remove the POD designation. Once it is removed, the account becomes a regular checking account with no named beneficiary. The money will go through your estate when you die instead of passing directly to someone.