How to Add a Beneficiary to a Savings Account

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 account transfers directly to that person without going through probate — the court process that normally handles your estate. The bank uses a form called a Payable on Death (POD) designation or Transfer on Death (TOD) designation to make this happen.

Most banks and credit unions allow you to add a beneficiary when you open the account or anytime after. The process is straightforward: you fill out a form at your bank, name the person, provide their Social Security number or tax ID, and decide what percentage of the account they receive. There is no cost, and naming a beneficiary does not change how you use the account while you are alive.

The key difference between a POD beneficiary and leaving money in your will is speed and simplicity. A will goes through probate, which can take months or years and costs money in court fees. A POD account transfers within days of the bank being notified of your death, and the beneficiary gets the full amount without court involvement.

Key Takeaways

• You can name one or more beneficiaries on a savings account using a Payable on Death (POD) form, available at most banks and credit unions.
• The money passes directly to your beneficiary after you die without going through probate, usually within a few days of the bank receiving a death certificate.
• You can change or remove a beneficiary anytime while you are alive, and the account remains fully yours to use and withdraw from.
• If you name multiple beneficiaries, you decide whether they split the account equally or receive different percentages.
• A POD account does not override a will or trust — if you name a beneficiary on the account but leave the money to someone else in your will, the POD beneficiary gets the account funds.

How to name a beneficiary on your savings account

Contact your bank or credit union and ask for the Payable on Death form or beneficiary designation form. Some banks call it a POD form, others call it a TOD form or simply a beneficiary form — the name varies, but the function is the same. You can usually get the form in person at a branch, by phone, or by downloading it from the bank's website.

Fill in the form with the beneficiary's full legal name, date of birth, and Social Security number or tax ID. If you want to name more than one beneficiary, list each person and the percentage of the account they receive. For example, you might leave 50% to your spouse and 25% each to two adult children. The percentages must add up to 100%.

Sign the form in front of a bank employee or notary, depending on your bank's rules. Some banks require a notarized signature; others do not. Return the completed form to the bank. The bank will keep it on file, and the designation takes effect immediately. You do not need to tell your beneficiary, though it is often a good idea so they know to contact the bank after you die.

What happens to the account after you die

When you pass away, your beneficiary (or your family) should notify the bank and provide a certified copy of your death certificate. The bank will verify the death certificate and transfer the account funds to the beneficiary. This usually takes three to seven business days, though some banks process it faster.

The beneficiary does not have to go to court or hire a lawyer. They simply present the death certificate to the bank, and the money is theirs. If there are multiple beneficiaries, each receives their designated percentage. The account is then closed.

If you die without naming a beneficiary, the account becomes part of your estate and goes through probate. That means a court decides who gets the money based on your will or, if you have no will, based on your state's inheritance laws. Probate can take six months to two years and costs money in legal and court fees.

You can change or remove a beneficiary anytime

A POD designation is not permanent. You can change the beneficiary, add more beneficiaries, or remove a beneficiary entirely by filling out a new form and submitting it to the bank. The new form replaces the old one. This is useful if your circumstances change — for example, if you get married, have children, or want to update who receives the account.

You do not need permission from the current beneficiary to change the designation. The account is yours while you are alive, and you have full control over who receives it after you die. If you want to remove a beneficiary entirely, you can do that too — the account will then go through probate when you die, or you can name a new beneficiary.

Keep your beneficiary information current. If you move, change banks, or want to update your choices, contact the bank and request a new form. Some banks send reminders to review your beneficiary designation every few years; others do not, so it is your responsibility to check.

Multiple beneficiaries and how the money splits

You can name as many beneficiaries as you want on a single savings account. When you fill out the form, you specify what percentage each person receives. If you name three beneficiaries and want them to split equally, you would give each one 33.33%. If you want one person to receive more, you can assign them 50% and the other two 25% each.

If you name multiple beneficiaries but do not specify percentages, most banks will split the account equally among them. However, it is better to be explicit on the form so there is no confusion or dispute after you die. Write the percentages clearly and make sure they add up to 100%.

If one of your beneficiaries dies before you do, that person's share typically goes back into the account and is divided among the surviving beneficiaries according to the percentages you listed. For example, if you name your spouse and your adult child as equal beneficiaries (50% each) and your spouse dies first, your child receives the full account. Check with your bank about their specific rules, as this can vary.

POD accounts and your will or trust

A Payable on Death designation on a savings account is separate from your will or trust. If you name a beneficiary on the account but your will says the money should go to someone else, the POD beneficiary wins. The account funds transfer directly to them outside of probate, regardless of what your will says.

This is why it is important to keep your beneficiary designations in sync with your overall estate plan. If you have a will or trust that names different heirs, make sure your savings account beneficiary matches your intentions. If you want the account to go through your trust instead of directly to a person, you can name your trust as the beneficiary on the POD form.

Some people use POD accounts as part of a larger plan: they name a spouse or adult child as the POD beneficiary on a savings account, and they use a will or trust to handle other assets like a house, investments, or retirement accounts. Talk to an estate planning attorney if you have a complex situation or want to make sure all your accounts and assets are set up the way you intend.

Taxes and the beneficiary's responsibility

When a beneficiary receives a POD savings account, they do not owe income tax on the money itself. The account was already taxed while you were alive. However, if the account has earned interest between the time you died and the time the bank transferred it, that interest may be taxable to the beneficiary or to your estate, depending on the amount and your state's rules.

The bank does not withhold taxes from the transfer. The beneficiary simply receives the full account balance. If there is a small amount of interest earned after your death, it is usually not enough to trigger a tax bill, but the beneficiary should keep records in case they need to report it.

If the account is very large, your estate may owe federal estate tax, but that is a separate issue from the POD transfer itself. Estate tax applies to the total value of everything you own, not just the savings account. Most estates do not owe federal estate tax unless they exceed a certain threshold (which changes yearly and is quite high). A lawyer or accountant can advise you if your estate might be subject to estate tax.

Frequently Asked Questions

What if I name a minor as a beneficiary?

Most banks will not transfer a large account directly to a minor. Instead, the funds go to a court-appointed guardian or are held in a custodial account until the minor reaches age 18 or 21, depending on your state. If you want to leave money to a minor, consider naming an adult (like a parent or trusted relative) as the beneficiary and asking them in your will to use the money for the child's benefit, or set up a trust that names the minor as the beneficiary.

Can I name a pet or charity as a beneficiary?

No, a beneficiary must be a person or an organization with a tax ID, like a charity or nonprofit. You cannot name a pet. If you want to leave money for a pet's care, you can name a trusted person as the beneficiary and ask them in your will to use the money for the pet, or you can set up a pet trust with an attorney.

Does naming a beneficiary affect my credit or my ability to borrow?

No. A POD designation is just paperwork on file with the bank. It does not change your account balance, your credit score, or your ability to borrow money. The account is still yours to use, and the beneficiary has no claim to it while you are alive.

What if I want to remove a beneficiary but not name a new one?

You can remove a beneficiary by submitting a new form to the bank that leaves the beneficiary field blank or says "no beneficiary." The account will then go through probate when you die, or you can name a new beneficiary later if you change your mind.

Do I need to tell my beneficiary I named them?

You do not have to, but it is often a good idea. If your beneficiary does not know about the account, they may not contact the bank after you die, and the money could sit unclaimed. Telling them also gives you a chance to explain where the account is and how to access it. You can also leave written instructions with your will or in a safe place so your family knows to look for it.