POD stands for "payable on death" — it's a way to name who gets money in your account after you die

A POD designation is an instruction you give your bank about what happens to the money in your account when you pass away. Instead of that money going through your will or being frozen while your estate is settled, it goes directly to the person or people you name. The bank handles the transfer — your family does not have to go to court.

You set up a POD when you open the account or add it later. The person you name (called the POD beneficiary) has no access to the money while you are alive. They only receive it after you die, and only if you have not already spent it or changed the designation.

POD is one of the simplest ways to make sure money reaches the people you want it to reach. It costs nothing to set up, and it overrides what your will says — so if your will leaves the account to one person but your POD names another, the POD beneficiary gets the money.

Key Takeaways

  • A POD designation tells your bank who should receive the money in your account after you die, without going through probate or your will.
  • You can name one person or multiple people as POD beneficiaries, and you can change or remove the designation at any time while you are alive.
  • The POD beneficiary has no access to the account during your lifetime, even if they are named.
  • POD works on savings accounts, checking accounts, and money market accounts at most banks and credit unions.
  • If you name multiple beneficiaries, most banks split the money equally unless you specify different amounts.

How to add a POD to your account

When you open a new account, the bank will ask if you want to name a beneficiary. You can say yes and provide their name and contact information right then. If you already have an account without a POD, you can add one by visiting your bank branch, calling customer service, or using online banking if your bank offers it.

You will need to provide the beneficiary's full legal name and usually their address. Some banks also ask for a phone number or email. If you name more than one person, tell the bank how you want the money split — equally, or in specific percentages or dollar amounts. If you do not specify, most banks divide it equally.

The bank will give you a form to sign, or you may sign electronically through their website. Keep a copy for your records. There is no fee for this service.

What happens when you die

When you pass away, your family or the executor of your estate should notify the bank. They will need to provide a death certificate. The bank will verify the POD beneficiary's identity and then transfer the money directly to them — usually within a few days to a couple of weeks.

The beneficiary does not have to wait for probate (the legal process of settling your estate) to receive the money. This is one of the main reasons people use POD: it is fast and avoids court involvement for that specific account.

POD versus other ways to pass money to someone

A joint account is different from a POD account. On a joint account, the other person can use the money while you are alive. On a POD account, they cannot. When you die, a joint account usually goes to the surviving joint owner automatically, while a POD account goes to the named beneficiary.

A will is a legal document that says who gets your money and property. A POD is simpler and faster — it does not require a will or court approval. However, a will lets you name a guardian for minor children and handle more complex situations. Many people use both: a POD for bank accounts and a will for everything else.

A trust is another option that lets you control what happens to your money after you die. Trusts are more complex and usually cost money to set up, but they give you more control over how and when beneficiaries receive money. A POD is much simpler if you just want the money to go to one or two people right away.

Changing or removing a POD

You can change your POD beneficiary at any time while you are alive. Contact your bank and ask to update the designation. You will fill out a new form, sign it, and the bank will replace the old one with the new one. There is no fee, and the change usually takes effect when ready.

You can also remove the POD entirely, which means the money in that account will go through your will or to your estate instead. Again, contact the bank, sign a form, and you are done.

Make sure the bank confirms the change in writing. Do not assume it is done just because you asked. Keep the confirmation with your important documents so your family knows what you intended.

Things to know before naming a beneficiary

If you name someone as a POD beneficiary, make sure they know about it. If they do not know the money is coming and they are not expecting it, they may miss the important date to claim it or not know how to contact the bank. Write it down in your will or in a letter to your family.

If you name a minor child as a POD beneficiary, the bank will not release the money to them directly when you die. Instead, it will go to a court-appointed guardian or trustee until the child turns 18 or 21 (depending on your state). This can delay access to the money, so some people name an adult instead and trust them to use it for the child's benefit.

If you are married and name someone other than your spouse as a POD beneficiary, your spouse may have legal rights to the account depending on your state's laws. Check with your bank or a lawyer if this applies to you.

POD on different types of accounts

Most banks and credit unions allow POD on savings accounts, checking accounts, and money market accounts. Some also allow it on certificates of deposit (CDs). However, not all financial institutions offer POD — some require you to use a will or trust instead. When you open an account, ask whether POD is available.

POD does not work on investment accounts, retirement accounts (like IRAs or 401(k)s), or brokerage accounts. Those accounts have their own beneficiary designation process, which is separate from POD. If you have a retirement account, you will name a beneficiary directly with that account provider, not through your bank.

Frequently Asked Questions

Can I name more than one person as a POD beneficiary?

Yes. You can name as many people as you want. Tell the bank how to split the money — equally, or in specific percentages. If you do not specify, most banks divide it equally among all named beneficiaries.

What if I name someone as POD but then change my mind?

You can change or remove the POD at any time while you are alive. Contact your bank, fill out a new form, and sign it. The change takes effect once the bank processes it. Keep the confirmation in writing.

Does the POD beneficiary pay taxes on the money they receive?

Generally, no. Money transferred through POD is not considered income to the beneficiary, so they do not owe federal income tax on it. However, state laws vary, and if the account earned interest before your death, that interest may be taxable to your estate. Ask a tax professional or your bank for details.

What if I die without naming a POD beneficiary?

The money in the account becomes part of your estate and goes through probate. It will be distributed according to your will, or if you do not have a will, according to your state's laws. This process takes longer and may involve court fees.

Can a creditor or debt collector take money from a POD account?

While you are alive, yes — creditors can pursue the account like any other asset. After you die, the money is usually protected from your debts once it reaches the beneficiary, though laws vary by state. Ask your bank or a lawyer about your state's rules.