Yes, you can name a beneficiary on most savings accounts, and it bypasses probate when you die
A beneficiary on a savings account is a person you name to receive the money in that account after you pass away. When you die, the bank transfers the funds directly to that person — the money does not go through your will or your estate. This is called a payable-on-death (POD) account or a transfer-on-death (TOD) account, depending on your bank and your state.
The key difference from leaving money in your will: a beneficiary designation happens outside the probate process. Your executor does not have to file paperwork with the court, and your beneficiary can access the money much faster — often within days or weeks instead of months. The bank handles it directly once they receive a death certificate and proof of the beneficiary's identity.
Most banks allow you to name one or more beneficiaries on a savings account at no cost. Some banks let you name a primary beneficiary and one or more backup beneficiaries in case the primary person dies before you do. The rules vary slightly by bank and by state, so you will need to check with your specific bank about what they offer.
Key Takeaways
- A beneficiary designation on a savings account lets money pass directly to that person after you die, without going through probate or your will.
- You can usually name one or more beneficiaries at no cost when you open the account or anytime afterward by contacting your bank.
- The beneficiary has no access to the money while you are alive — you keep full control of the account.
- If you name multiple beneficiaries, the money is typically split equally among them unless you specify different percentages.
- You can change or remove a beneficiary at any time during your lifetime by notifying your bank in writing.
How to name a beneficiary when you open a savings account
When you open a new savings account, the bank will ask whether you want to name a beneficiary. This is usually a checkbox or a separate form section. You will need to provide the beneficiary's full legal name, date of birth, and Social Security number or tax ID. Some banks also ask for their address and relationship to you (spouse, child, parent, friend, etc.), though that information is not required for the designation to be valid.
If the bank does not ask about beneficiaries during the account-opening process, you can still add one later. Call the bank, visit a branch in person, or log into your online account — most banks now let you add or change a beneficiary through their website or mobile app. Ask the bank which method they prefer, because some require a signature on a form for legal reasons.
You do not have to name a beneficiary. If you do not, the money in the account will be part of your estate when you die and will be distributed according to your will or your state's intestacy laws (the rules that apply when there is no will). Naming a beneficiary is optional, but it is a simple way to make sure the money goes where you want it to go.
What happens if you name multiple beneficiaries
You can name more than one beneficiary on a savings account. When you do, the bank will ask how you want the money divided. The most common option is to split it equally — if you name three beneficiaries, each gets one-third. You can also specify different percentages if you want one person to receive more than the others.
If one of your beneficiaries dies before you do, what happens next depends on how the account is set up. Some banks allow you to name a contingent beneficiary (also called a backup beneficiary) who receives the money if the primary beneficiary has already died. If you do not name a contingent beneficiary and your primary beneficiary dies first, the money goes to your estate instead of to the other beneficiaries you named.
This is why it is worth reviewing your beneficiary designation every few years, especially after major life changes like a divorce, marriage, or the birth of a child. If your circumstances have changed, you may want to update who receives the money or add a contingent beneficiary.
The difference between a beneficiary and a joint account owner
A beneficiary is not the same as a joint account owner. A joint account owner has access to the money right now — they can deposit, withdraw, and spend from the account while you are alive. A beneficiary has no access to the account during your lifetime. They only receive the money after you die.
This matters because if you add someone as a joint owner, you are giving them control of your money immediately. If you add them as a beneficiary, you keep full control until you pass away. Some people add a spouse or adult child as a joint owner for convenience (so that person can pay bills or handle emergencies), but add other family members as beneficiaries only.
If you have a joint account with someone and you die, the money typically goes to the surviving joint owner automatically — it does not go to your beneficiaries. This is called right of survivorship. So if you have a joint account with your spouse and you also name your adult child as a beneficiary on that same account, your spouse gets the money, not your child. The beneficiary designation on a joint account usually only applies if both owners have died.
How to change or remove a beneficiary
You can change your beneficiary at any time while you are alive. Contact your bank and ask for the process — some banks let you do it online, some require a phone call, and some require you to visit a branch or submit a signed form by mail. There is no fee to change a beneficiary, and the change takes effect as soon as the bank processes it.
If you want to remove a beneficiary entirely, you can do that too. Just tell the bank you want to remove the beneficiary designation, and the account will no longer have one. If you later change your mind, you can add a new beneficiary. The bank will keep a record of the change, so there is a paper trail if anyone questions it later.
Some life events make it especially important to update your beneficiary: a divorce, a marriage, the birth of a child, a significant change in your relationship with the person you named, or if the beneficiary dies. You do not have to update it for any of these reasons — the law does not require it — but updating it makes sure your money goes where you actually want it to go.
What the bank needs after you die
When you pass away, your beneficiary will need to contact the bank and provide a certified copy of your death certificate. The bank will verify the beneficiary's identity (usually with a government-issued ID) and then transfer the money. Some banks also ask for a copy of the beneficiary's Social Security number or tax ID to confirm they are the right person.
The time it takes varies by bank, but most transfer the money within a few days to a few weeks. This is much faster than probate, which can take several months or even years. The beneficiary does not have to hire a lawyer or go to court — the bank handles it directly.
If there are multiple beneficiaries, each one will need to provide their own death certificate and ID. The bank will then split the money according to the percentages you specified (or equally if you did not specify percentages).
State-specific rules and limits
Most states allow you to name a beneficiary on a savings account, but a few states have specific rules about how it works or what it is called. Some states use the term payable-on-death (POD), while others use transfer-on-death (TOD) or in-trust-for (ITF). The function is the same — the money passes to the beneficiary outside of probate — but the terminology differs.
A few states have limits on how much money can pass to a beneficiary this way, or they require the account to be set up in a specific format. Your bank can tell you whether your state has any special rules. If you are moving to a different state or your beneficiary lives in a different state, the beneficiary designation is still valid — the account is governed by the laws of the state where the bank is located, not where you or the beneficiary live.
Frequently Asked Questions
Can a beneficiary access my savings account while I'm still alive?
No. A beneficiary has no access to the account during your lifetime. Only you (and any joint account owners) can withdraw money or make changes. The beneficiary only receives the money after you die and the bank processes the death certificate.
What if I name someone as a beneficiary and then change my mind?
You can remove or change the beneficiary at any time by contacting your bank. There is no fee, and the change takes effect once the bank processes it. You keep full control of the account and the beneficiary designation until you die.
Do I need a will if I name a beneficiary on my savings account?
A beneficiary designation and a will serve different purposes. The beneficiary designation covers only that specific account. A will covers everything else you own — your house, car, personal items, and any accounts without a beneficiary. You may want both, depending on your situation.
What happens if my beneficiary dies before I do?
If you named a contingent (backup) beneficiary, that person receives the money. If you did not name a contingent beneficiary, the money becomes part of your estate and is distributed according to your will or your state's intestacy laws. You can update your beneficiary at any time to add a contingent beneficiary.
Can I name a minor as a beneficiary?
Yes, but the money cannot be given directly to a minor. When you die, the bank will hold the funds until the minor reaches the age of majority (usually 18 or 21, depending on your state). You can also name a guardian or custodian in your will to manage the money on the minor's behalf.