Yes, most savings accounts let you name a beneficiary, 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 account directly to that person—no will needed, no court process, no waiting. The beneficiary designation overrides whatever your will says, so if your will leaves the account to someone else, the named beneficiary gets it instead.
Not all savings accounts come with this option built in. Traditional savings accounts at most banks and credit unions do offer it. Online banks usually do too. Some savings products—like certain money market accounts or promotional savings vehicles—may not. You have to ask your bank directly or check your account paperwork to know for sure.
The person you name does not have access to the account while you are alive. They cannot withdraw money, see the balance, or make changes. The account is entirely yours until you die. After your death, the bank will ask the beneficiary to provide a death certificate and proof of identity, then move the money.
Key Takeaways
- Most banks and credit unions let you name one or more beneficiaries on a savings account at no cost.
- The beneficiary receives the account balance directly after you die, without going through probate or a will.
- You can change or remove a beneficiary at any time while you are alive by contacting your bank.
- The beneficiary has no access to the account or its money until after you die and provide a death certificate.
- If you name multiple beneficiaries, the bank will split the account balance among them according to the percentages you set.
How to name a beneficiary on your savings account
Contact your bank or credit union and ask for the beneficiary designation form. Some banks call it a "payable on death" or POD form. You can usually get it by phone, in person at a branch, or online through your account settings. Fill in the beneficiary's full legal name, date of birth, and Social Security number or tax ID. You will also need their mailing address.
If you want to name more than one beneficiary, you specify what percentage each person gets. For example, you could say 50% to your spouse and 25% each to two adult children. The bank will hold these instructions on file. You sign the form, and the bank records it. There is no fee for this.
Keep a copy of the signed form for your records. If you move banks, the beneficiary designation does not transfer—you have to set it up again at the new bank. If you close the account, the designation ends.
What happens to the account after you die
When you pass away, your family or the executor of your estate should notify the bank. The beneficiary will need to contact the bank directly with a certified copy of your death certificate. The bank will verify the beneficiary's identity and then transfer the account balance to them. This usually takes one to three weeks, though it can vary by bank.
The money goes directly to the beneficiary and does not become part of your estate. That means it is not subject to probate, creditor claims, or estate taxes in most cases. It is one of the fastest ways to get money to someone after death.
If you name a minor as a beneficiary, the bank may hold the money in a blocked account until the child turns 18 or 21, depending on state law. Some banks require a court-appointed guardian to claim the money on the minor's behalf. Check with your bank about their policy before naming a child.
Changing or removing a beneficiary
You can change your beneficiary at any time while you are alive. Contact your bank and ask to update the beneficiary designation. Fill out a new form with the new person's information, sign it, and submit it. The bank will replace the old designation with the new one. There is no fee and no waiting period.
If you want to remove a beneficiary entirely, you can do that too. Some banks let you leave the beneficiary field blank, which means the account becomes part of your estate when you die. Other banks require you to name at least one beneficiary. Ask your bank what their policy is.
Life changes—divorce, remarriage, estrangement, death of a beneficiary—can make your old designation outdated. Review your beneficiary designations every few years or after a major life event. If your named beneficiary dies before you do, the money typically goes to your estate unless you named an alternate beneficiary.
Beneficiaries versus joint account holders
A beneficiary is different from a joint account holder. A joint account holder can access the account and withdraw money right now, while you are alive. A beneficiary cannot touch the account until after you die. If you want someone to help manage your money during your lifetime, a joint account makes sense. If you only want them to have the money after you are gone, a beneficiary designation is the right choice.
Some people set up both: a joint account for day-to-day expenses with a spouse, and a separate savings account with a beneficiary designation for money meant for adult children or a charity. The two work independently.
What to know about taxes and the beneficiary
The beneficiary does not pay income tax on the money they receive from a savings account beneficiary designation. The account balance itself is not taxable income to them. However, if the account has earned interest between your death and when the bank transfers the money, that interest may be taxable to your estate or the beneficiary, depending on the amount and how long the transfer takes.
Federal estate tax is a concern only if your total estate is very large—over $13.61 million in 2024, though this threshold changes yearly. Most people's savings accounts do not trigger estate tax. State-level inheritance taxes vary; some states tax beneficiaries, others do not. Check your state's rules if you live in a state with an inheritance tax.
The beneficiary should keep the paperwork from the bank showing the transfer. If they ever need to prove where the money came from—for a loan application, for example—that documentation helps.
If your bank does not offer beneficiary designations
Some smaller banks, credit unions, or specialty savings products do not have a beneficiary option. If that is the case, you have other ways to pass the account to someone. You can name the account in your will, but then it goes through probate, which takes months and costs money. You can also set up a payable on death account (POD) at a different bank that does offer it, or open a transfer on death account (TOD) if your state allows it for savings accounts.
Another option is to add the person as a joint account holder, but that gives them access to the money now, which may not be what you want. Ask your bank what options are available for your specific account type.
Frequently Asked Questions
Can a beneficiary access my savings account before I die?
No. A beneficiary has no access to the account, its balance, or any transactions while you are alive. Only you and any joint account holders can use the account. The beneficiary's rights begin only after you die and they provide a death certificate to the bank.
What if I name someone as a beneficiary and then we have a falling out?
You can remove or change the beneficiary at any time by contacting your bank and submitting a new designation form. There is no waiting period or penalty. The change takes effect as soon as the bank processes it. Keep the confirmation in your records.
Can I name a charity as a beneficiary?
Yes. You can name a registered nonprofit organization as a beneficiary. You will need the charity's legal name and tax ID number. This is a simple way to leave a gift to an organization you care about without going through your will.
What happens if my named beneficiary dies before I do?
The money typically goes to your estate and is distributed according to your will or your state's intestacy laws. Some banks let you name an alternate or contingent beneficiary to prevent this. Ask your bank if they offer that option when you set up your designation.
Do I need a lawyer to set up a beneficiary on my savings account?
No. You can do it yourself by contacting your bank and filling out their beneficiary designation form. It is free and takes about 10 minutes. A lawyer is not needed unless you have a complex estate or want to coordinate this with other planning.