Can You Have a Beneficiary on a Savings Account?

Yes, you can add a beneficiary to your savings accounts, including high-yield savings accounts, money market accounts, and certificates of deposit (CDs). Designating a beneficiary ensures that your money passes directly to your chosen person when you pass away, bypassing the often lengthy probate process.

Reasons to Add a Savings Account Beneficiary

The primary reason to add a beneficiary to your savings account is to avoid probate. Probate is a legal process for transferring property after a person passes away, which can take a year or more, tying up assets your heirs may need to cover expenses. Naming a beneficiary for your account doesn’t replace having a will or living trust, but it does ensure that your financial institution follows your beneficiary instructions, which are considered part of your banking contract.

How to Name a Beneficiary on a Savings Account

The process of naming a beneficiary may vary slightly from one financial institution to another. At some banks, an account that names a beneficiary is called a payable-on-death account; at other financial institutions, it may be known as a tentative or informal trust. Here are the general steps:

1. Complete the forms: You’ll need the full name of each beneficiary, and possibly their mailing address, phone number, date of birth, and/or Social Security number.
2. Notify your beneficiaries: While not required, notifying your beneficiaries can help them know to request the money when you die.
3. Update beneficiary information: Keep your bank informed if you decide to change or add beneficiaries, or if their information changes.

Do You Need a Beneficiary if You Have a Joint Account?

A joint account typically passes to the surviving account holder(s) when one account holder dies. However, naming a beneficiary ensures that the money in the account is distributed according to your wishes when all parties on the account are deceased.

The Bottom Line

Adding a beneficiary to your savings accounts is easy and can be a real help to your loved ones if funds are needed immediately to cover bills and final expenses. While you’re at it, you can add beneficiaries to many other types of bank and financial accounts, including checking, money market, investment, and retirement accounts. Even when a larger will, trust, and estate plan are in place, payable-on-death accounts can streamline at least one part of the inheritance process and make settling your estate a bit easier.

Contact O1ne Mortgage for Your Mortgage Service Needs

At O1ne Mortgage, we understand the importance of financial planning and security. If you have any questions about adding a beneficiary to your savings account or need assistance with any mortgage services, don’t hesitate to call us at 213-732-3074. Our team of experts is here to help you every step of the way.