POD stands for "Payable on Death" and names who gets your savings bond if you die

A POD designation on a savings bond is a way to pass the bond directly to another person without going through your will or probate court. When you register a bond with a POD name, that person becomes the owner automatically the moment you die—the bond skips the usual legal process and goes straight to them.

This is different from naming someone as a beneficiary on other accounts. With a savings bond POD, the named person has no claim to the bond while you are alive. They cannot touch it, borrow against it, or access it in any way. Only after your death does the POD designation take effect.

The Treasury Department allows you to add a POD name when you first register a bond, or you can change it later by contacting the Treasury or your financial institution. The process is straightforward, but the rules about who can be named and what happens next matter for your family's situation.

Key Takeaways

  • POD means the bond passes directly to the named person after your death, without probate or your will.
  • The POD recipient has no access to the bond while you are alive, even if they are named.
  • You can add or change a POD name on a bond you already own by contacting the Treasury or your bank.
  • If you die without naming a POD, the bond becomes part of your estate and is distributed according to your will or state law.

How to add or change a POD name on a savings bond

If you own paper bonds, you register the POD name directly on the bond itself when you buy it. The Treasury form shows a line for the owner and a separate line for the POD recipient. If you already own a bond without a POD name, you can add one by contacting the Treasury Department directly or through your bank if they hold the bond for you.

For electronic bonds held through TreasuryDirect (the Treasury's online system), you set up the POD designation in your account settings. You log in, go to the bond details, and add the name and Social Security number of the person you want to inherit it. You can change this at any time while you are alive.

The person you name does not have to sign anything or agree to it. They do not even have to know they are named. However, it is a good idea to tell them, so they know to contact the Treasury after you die and know where to find the bond information.

Who can be named as a POD recipient

You can name almost anyone as a POD recipient—a spouse, adult child, parent, friend, or even a charity. There is no legal requirement that they be related to you. The Treasury only requires that you provide their full legal name and Social Security number or tax identification number.

You cannot name a minor as a POD recipient on a savings bond. If you want the bond to go to a child, you will need to use a different method, such as naming a guardian or setting up a trust. Some people name an adult child or trusted adult to hold the bond for a minor until they reach adulthood.

You can also name only one POD recipient per bond. If you want multiple people to inherit, you would need to register separate bonds with different POD names, or leave some bonds without a POD designation so they pass through your will instead.

What happens to a POD bond after you die

When you die, the person named as POD becomes the owner of the bond immediately. They do not have to wait for probate or for your will to be read. They can contact the Treasury Department with a copy of your death certificate and proof of their identity, and the Treasury will transfer the bond into their name or pay out the value.

The bond will have earned interest up to the date of your death, and the POD recipient receives the full value including that interest. They can then decide whether to keep the bond, cash it in, or transfer it to another account. The Treasury processes these requests within a few weeks.

If the POD recipient dies before you do, the bond does not automatically go to anyone else. It becomes part of your estate and is distributed according to your will or state law. This is why it is important to review your POD designations periodically and update them if circumstances change.

POD versus other ways to pass on a savings bond

If you do not name a POD recipient, the bond is treated like any other asset in your estate. It goes through probate (the court process that settles your affairs) and is distributed according to your will, or according to your state's intestacy laws if you have no will. This process takes longer and costs more in legal fees.

Some people use a revocable living trust instead of POD designations. A trust lets you control what happens to multiple assets, including bonds, and can be more flexible if your situation is complicated. However, a trust requires more paperwork to set up and maintain.

A POD designation is simpler and costs nothing. It works well if you have a clear idea of who should inherit the bond and you do not need the flexibility of a trust. You can always change your mind later, and you can use POD on some bonds and leave others to pass through your will.

Tax and estate planning considerations for POD bonds

The interest earned on a savings bond is subject to federal income tax, and the POD recipient will owe tax on the interest that accrued during your lifetime. They will receive a 1099-INT form from the Treasury showing the taxable interest, and they report it on their tax return for the year you died.

POD bonds do not avoid estate tax. If your total estate is large enough to owe federal estate tax, the value of the bond (including accrued interest) counts toward that total. However, most estates are small enough that estate tax is not a concern.

If you are trying to reduce your taxable estate or plan for a large inheritance, talk to a tax professional or estate attorney. They can help you decide whether POD designations, trusts, or other tools make sense for your situation. The Treasury's website has general information, but it cannot give personalized guidance.

What to do if you are named as a POD recipient

If someone has named you as the POD recipient on their savings bond, you have no responsibilities while they are alive. You cannot access the bond, and you do not need to do anything. The bond owner can change the designation or remove you at any time without telling you.

After the person dies, you will need to contact the Treasury Department with a certified copy of the death certificate and proof of your identity (such as a driver's license). The Treasury will verify that you are the named POD recipient and transfer the bond to you or pay out its value. You can find contact information and forms on the Treasury's website.

Keep in mind that you will owe income tax on the interest that accrued on the bond. The Treasury will send you a 1099-INT form, and you report that interest on your tax return. If the bond was very large, you may also want to consult a tax professional about how to handle the inheritance.

Frequently Asked Questions

Can I name more than one person as POD on a single bond?

No. Each bond can have only one POD recipient. If you want multiple people to inherit, you can register separate bonds with different POD names, or you can leave some bonds without a POD so they pass through your will and can be divided among heirs.

Can I change or remove a POD name after I buy the bond?

Yes. You can change or remove a POD designation at any time while you are alive. Contact the Treasury Department or your bank (if they hold the bond) with a written request. For TreasuryDirect bonds, you can make the change yourself in your online account.

What if the POD recipient dies before I do?

The POD designation becomes void, and the bond is treated as part of your estate. It will be distributed according to your will or your state's intestacy laws. You should update your POD designations if a named recipient dies.

Does naming a POD recipient avoid probate?

Yes. A POD designation allows the bond to pass directly to the named person without going through probate court. This is faster and usually costs less than the probate process, though the bond's value still counts toward your total estate for tax purposes.

Will the POD recipient have to pay taxes on the bond?

The POD recipient will owe federal income tax on the interest that accrued on the bond during your lifetime. They will receive a 1099-INT form from the Treasury and report that interest on their tax return for the year you died.