POD stands for "Payable on Death" and lets you name someone to inherit money in your account without going through probate
A POD designation is an instruction you give your bank that says: when I die, transfer the money in this account directly to the person I name. The bank holds the money while you're alive. When you die, the bank releases it to your named beneficiary without waiting for a will to be read or a court to approve the transfer. The beneficiary gets the account balance, minus any outstanding debts the bank can legally claim against it.
POD is one of the simplest ways to pass money to someone after you die. It costs nothing to set up, requires no lawyer, and the transfer usually happens within days of the bank receiving a death certificate. The person you name has no access to the account while you're alive—you keep full control and can change your mind at any time.
Key Takeaways
- POD lets you name a beneficiary to receive your account balance directly after you die, bypassing probate court entirely.
- You keep full control of the account while alive and can change or remove the POD beneficiary whenever you want.
- The named beneficiary receives only what's in the account at the time of your death and has no access before then.
- Setting up POD costs nothing and requires only a form from your bank; you do not need a lawyer or a will.
- POD works on savings accounts, checking accounts, and money market accounts at most banks and credit unions.
How to set up POD on your account
Contact your bank or credit union and ask for the POD form, sometimes called a "Payable on Death Designation" or "Transfer on Death" form. You'll provide the full legal name, date of birth, and Social Security number of the person you want to receive the money. Some banks let you name more than one beneficiary and specify how the money splits between them—for example, 50% to your daughter and 50% to your son.
Sign the form in front of a bank employee (or sometimes a notary, depending on your bank's rules). The bank keeps the form on file. You don't need to tell the beneficiary you've named them, though many people do. The designation takes effect immediately, but the money doesn't transfer until you die and the bank receives proof of death.
Some banks now let you set up or change a POD beneficiary online through your account dashboard. Check your bank's website or call the number on the back of your card to ask whether this option is available to you.
What happens to the account after you die
When you die, your family or executor should notify the bank. The bank will ask for a death certificate (usually an official certified copy) and may ask for other paperwork depending on the account balance and your state's rules. Once the bank verifies your death, it transfers the full account balance to the beneficiary you named.
The transfer typically takes five to ten business days, though some banks move faster. The beneficiary receives the money in a check, a direct deposit to their own account, or a new account opened in their name—the method depends on what the bank offers and what the beneficiary requests.
If the beneficiary dies before you do, the money does not automatically go to their heirs. Instead, it becomes part of your estate and goes through probate or is distributed according to your will. For this reason, some people name a backup beneficiary (called a "contingent beneficiary") to receive the money if the first choice dies first.
POD versus a will or trust
A will is a legal document that says who gets your property after you die, but it must go through probate—a court process that can take months or years and costs money in legal fees. A POD account bypasses probate entirely because the bank transfers the money directly to the named person based on the form you signed.
A trust is a more complex legal structure that can hold money, property, and other assets. You can name a trustee to manage those assets and distribute them after you die. Trusts also avoid probate but require a lawyer to set up and cost several hundred to several thousand dollars. A POD account is free and requires no lawyer.
Many people use POD for simpler accounts (like a savings account with one or two beneficiaries) and a will or trust for larger estates or more complicated situations. POD and a will can work together—your will handles everything else, and the POD account transfers automatically outside of probate.
Limits and things to know about POD
POD only works on bank and credit union accounts. It does not work on investment accounts, retirement accounts (which have their own beneficiary rules), or property like a house. If you own a house and want to pass it to someone without probate, you would need a different tool, such as a transfer-on-death deed (available in some states) or a trust.
The beneficiary you name receives only the money in the account at the time of your death. If you owe the bank money—for example, an overdraft or a loan—the bank may take that from the POD transfer before giving the rest to your beneficiary. If you owe taxes or have other debts, creditors may have a claim against the account balance depending on your state's laws.
If you name someone as a POD beneficiary and also name them in your will to receive something else, both transfers happen. There is no conflict—the POD account goes directly to that person, and anything else in your will goes to them separately. However, if you name someone as a POD beneficiary and then change your will to cut them out, the POD designation still stands and they still receive the account.
Changing or removing a POD beneficiary
You can change your POD beneficiary at any time while you're alive. Contact your bank, fill out a new POD form with the new beneficiary's information, and sign it. The bank replaces the old form with the new one. There is no fee, and the change takes effect immediately.
If you want to remove the POD designation entirely and have the account go through probate instead, you can do that too—just ask the bank for a form to cancel the POD. Some people do this if they want the money to be divided among multiple heirs according to their will rather than going to a single POD beneficiary.
Keep in mind that if you divorce, most states do not automatically remove your ex-spouse as a POD beneficiary the way they do with a will. You must actively change the designation yourself. If you go through a divorce, contact your bank and update your POD beneficiary to make sure the money goes where you want it to.
POD at different types of banks
Most traditional banks and credit unions offer POD designations on savings accounts, checking accounts, and money market accounts. The process is the same across institutions—you fill out a form and name a beneficiary. Some online banks and smaller credit unions may have different procedures or may not offer POD at all, so ask your specific bank whether it's available.
If you have accounts at multiple banks, you can set up POD on each one separately and name the same person or different people as beneficiaries. This gives you flexibility—for example, you might name your spouse as the POD beneficiary on your main checking account and your adult child as the beneficiary on a savings account meant for them.
Frequently Asked Questions
Can the POD beneficiary access my account while I'm still alive?
No. The beneficiary has no access to the account, no right to see the balance, and no claim on the money until you die. You keep full control while you're alive. The beneficiary's only right is to receive the balance after your death is verified by the bank.
What if I name someone as POD beneficiary and then change my mind?
Contact your bank and ask to update or cancel the POD designation. You can name a different person, remove the designation entirely, or add a backup beneficiary. There is no fee and no waiting period—the change takes effect as soon as the bank processes the new form.
Does POD work on retirement accounts like an IRA or 401k?
No. Retirement accounts have their own beneficiary designation process separate from POD. When you open an IRA or 401k, you name a beneficiary on that account's specific form. That beneficiary receives the account after you die, but the rules and tax treatment are different from a POD bank account.
What happens if the POD beneficiary dies before I do?
The money does not go to their heirs automatically. Instead, it becomes part of your estate and is distributed according to your will or your state's inheritance laws. To prevent this, you can name a contingent (backup) beneficiary on the POD form when you set it up.
Do I need a lawyer to set up POD?
No. POD is free and requires only a form from your bank. You do not need a lawyer, and you do not need to go to court. The bank handles everything, and the transfer happens automatically after you die once the bank receives a death certificate.