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Capital One Finally Allows POD Accounts But There Are Issues


UPDATE: 12/3/2018: Capital One has added an online management system for adding and managing beneficiaries. Please refer to this blog post for more details.

After many years of customer complaints, Capital One has changed its beneficiary policy for 360 deposit accounts. Customers can now designate up to 10 beneficiaries to each account. Once beneficiaries are named, the bank account will be referred to as a "Payable on Death" (POD) account.

Here’s the link to Capital One’s POD beneficiary form. Customers who wish to add individuals as beneficiaries to their 360 accounts must do so by mailing or faxing in this form. The document must be notarized and filled out in its entirety. I was told that they are working to make this a self-service option on the website.

Long before Capital One acquired ING Direct, customers have been unable to designate beneficiaries on their deposit accounts. The only alternative for ING Direct/Capital One 360 customers was to register their accounts as a living trust account. This is a formal revocable trust that is typically set up by an attorney, in which the owner specifies who will receive the trust assets when the owner passes away. This isn’t a good alternative to a POD beneficiary for most people who want a quick and simple way to designate a beneficiary on a bank account.

There are several reasons why you may want to designate account beneficiaries on your bank accounts. First, it can make it much easier on your heirs. When you die, the accounts don’t have to go through the probate process. This can save your heirs time and legal expenses. The beneficiary can claim the account directly at the bank or credit union. Second, it’s an easy way to extend FDIC insurance coverage. As I described in this maximizing FDIC coverage post, it’s easy to insure up to $1.25 million at one bank by using five beneficiaries.

Unfortunately, Capital One’s new beneficiary policy has several issues. First, beneficiaries can only be individuals (no charities, entities or nonprofits). That can make it more difficult if a customer is using beneficiaries to extend FDIC coverage. Not everyone may have enough family or friends who they want to be beneficiaries. Also, there is more risk in the amount of FDIC insurance coverage when a beneficiary is an individual. If that person dies, you lose the extra FDIC coverage immediately. There’s no grace period.

The second issue with the new beneficiary policy is that Capital One requires that you specify the beneficiary’s US Tax ID (social security number or ITIN). Many people don’t want to know the social security numbers of their beneficiaries. They may not be close family members, and they may not want beneficiaries to know. Also, every time a social security number is given to another person or entity, the risk of identity theft increases. That’s one reason why institutions should only request a social security number when it’s absolutely necessary, and it’s not necessary for banks to know your beneficiaries’ social security numbers when you’re still alive.

The third issue with the new beneficiary policy is that customers must designate a beneficiary by using a paper form that must be notarized and then mailed or faxed back to Capital One. That’s a lot of work and time. However, this should only be temporary. As I mentioned above, I was told that they are working on a beneficiary management system for customers that will be available on Capital One’s website later this year.

Other internet banks have made it easy for many years to designate multiple beneficiaries. For example, Ally Bank has allowed up to 10 beneficiaries per account, and the beneficiaries can be a person or entity. No beneficiary social security number is required. Also, the beneficiary designations can all be done online on Ally’s website.

Capital One’s new beneficiary policy is a step in the right direction, but more improvements are needed.

Related Pages: nationwide deals, Internet banks
  |     |   Comment #1
I note, the requirement to get the document notarized is ridiculous. I have never had to have a POD beneficiary form notarized! In my state, and one thing about it that Ken did not mention, it costs $10 per signature for a notarization. Banks used to do these things for customers for free, but not any more, not in many years. What I have faced is that the bank will require you to mail in the form so they have an original signature, won’t allow you to fax it instead or e-mail it over - that’s an irritant but not a big deal. I also find it ridiculous that Capital One will require a notarization but let you Fax it in — meaning they don’t even have an original notarization, making it challengeable! They make a ridiculous policy and then then undermine it!

Thank you, Ken, for picking up the problem about the Social Security number. I note, from the language they use on the form, it appears they REQUIRE that you have the beneficiary’s Social Security number, which is not required by law, this is their in-house policy; your beneficiary doesn’t even need to have a Social Security number. Just about all banks and credit unions will ask for that, but only very few actually require it. This is a long-running complaint of mine about the few banks or credit unions that require the Social Security number.

As Ken notes, a Social Security number is a highly sensitive thing that, for security reasons, should not be shared readily even with a friend. And I don’t even want it, if there were ever any issue of ID theft, I would have to be a suspect because I have their SS number! Just because you say you want to make someone your beneficiary does not mean they should give you their Social Security number, it is wrong to even ask a friend to hand over such a thing any more than to ask them to tell you all their bank accounts numbers. And, as in my case, it is not uncommon to NOT want your beneficiary to even know about being such, it can change their decisions in life, an impact I would not want, and it can lead to real problems and disappointments if you later decide to drop them as a beneficiary.

Thank you Ken for picking up on this problem. I think a LOT more publicity about it is needed so banks and credit unions will come to realize the issue too. I find that they don’t even seem to know what they are doing, at least some of these few that require the SS number seem to think they are required by law to get it; others insist they need it for identification later, but they do not, and gee, if it is so easy to get someone’s SS number merely by asking for it, then how could that be reliable identification!?
Very Anonymous
  |     |   Comment #7
$10? You got ripped. The guy at my local UPS Store charged me $2 the last time I needed a signature notarized.
  |     |   Comment #8
$10 for a signature notarization mandated by the state? You should work to change that.

But, its also easy to just not do business with Capital One too.
  |     |   Comment #9
Most credit unions will notarize signatures free of charge, if you are a member.
  |     |   Comment #12
My two credit unions that I asked about that said they only notarize documents you need for transactions done with the credit union not external documents.
  |     |   Comment #16
I'm in three credit unions that have branches near me. All three say they notarize for free. None of them have ever had a notary on staff, not at all in the past about 10 years -- maybe because it is this state. No wonder the service is free -- you get what you pay for.

And mind you, the $10 price I mention is per signature, so if you are doing this for a joint account, that is $20 for the two signatures just to satisfy Capital One with something they don't need!
  |     |   Comment #2
Thank you so very much for the detailed article about Capital One. I adore all the intricate details. It's too bad they don't let you list charities and .org's as POD's. It is just silly. What does it matter to them whether you list the name of a person or an organization.
  |     |   Comment #3
PODs are for individuals not organizations since the latter doesn’t die
  |     |   Comment #4
You don't have to die to be a recipient of a pod account... Lol
  |     |   Comment #5
Interesting...if the acct is payable on death, how could one be a recipient w/o death?
  |     |   Comment #13
The recipient is the one that receives the money after the account holder dies and they can be organizations. The payable on death means death of account holder.
  |     |   Comment #17
Nothing, the issue is who can be the beneficiary and you better be alive for that. Capital One won't let you name a charity as a BENEFICIARY.
  |     |   Comment #28
It is payable upon the death of the account owner, NOT the recipient.
  |     |   Comment #11
I totally agree, Jennifer. How silly of them! Please PM me your contact information and we'll discuss this in greater detail...
Mama J
  |     |   Comment #48
Can an IRA be a POD with beneficiaries at capital one?
  |     |   Comment #49
IRA accounts should always have beneficiary designations included with the account information. My mother used to have an IRA at Capital One (branch office) and there was a beneficiary designation included on the account profile. I believe you can designate more than one individual.
  |     |   Comment #10
The issue of providing the SSN of the beneficiaries is often a sticking point for some. For my pension and other retirement accounts and most bank accounts, I did not have to supply the beneficiary's SSN on the designation. There are some companies who insist on it (probably to use as a definitive identification in cases of disputes) and I could see it being used for authentication purposes. I just looked over my brokerage beneficiary change form and it does include boxes for the SSN of the beneficiaries.
  |     |   Comment #14
Yes, SS#s are better form of identification, however, I have the same problem as others. I don't want some people to know they are my beneficiaries and I don't know their SS# so I can't ask them either, plus the more these numbers are given out along with their names, it increases the chances for I.D. theft by hackers.
  |     |   Comment #18
DCGuy, I noted that most or maybe even all places ASK for the Social Security number. But when I ask whether it is mandatory, almost all of them say no, I either can leave that blank, or the manager will take care of it and open the POD without the SS number or the beneficiary. Only very few actually will bar the account without the beneificary's SS number.

And at this point, since literally everyone's SS number has been breached in hacking attacks at places like Equafax, it isn't at all a very good ID. You can do as well or better by providing birth date, current address and phone, which are all on a credit report the bank can access as wanted.

And it isn't just YOU who gets to decide whether the SS number can be obtained; the beneficiary might not think as you do and refuse to give it out, even if they know it is about being a beneficiary. They might feel like me that it is unnecessary so suspicious even from a close relative or best friend -- I would never give mine out to anyone, even if to be named as a beneficiary. Even my brothers don't know my SS number.

And a beneficiary does not need to have a SS number. I am thinking of naming two kids I know as my beneficiary and I know they don't have SS numbers. Yes, an SS number can be set up for a child, but parents don't necessary do that. That decision to set up a SS number for them is not mine. But I am still allowed by law to name them.

And as I always tell these places, the beneficiary can provide a SS number if the time should come.

Tell you what, DCGuy, give me you SS number, and I will name you as my beneficiary. OK?
  |     |   Comment #25

Most people tend to not reveal their private numbers to others (even relatives). Back over 40 years ago, the SSN was an optional number. As long as you NEVER got a job, you did not have to get one. Now SSNs are assigned to all newborns, unless you were born out in the streets or fields where no outside government department could assign you one.

The SSN is considered PII information and can only be used or distributed for official purposes. I am not at liberty to disclose it to any third party since doing so would be treated as an unauthorized disclosure.
  |     |   Comment #19
After reading many of the comments here, I see that some people have money but know very little about life.
A POD pay on death, is the death of the account holder. Without a beneficiary the account has to go through probate. That requires a lawyer, and that equals money. The reason you want all your accounts to have a beneficiary, is because it passes over clean,and fast with the proff of death of the account holder with a death certificate.
Thank your stars that Cap One added the beneficiary form. Most of you problem did not even know there was none before. Have any idea what there answer was when I inquired about the form. I was told to set up a TRUST. Know what a trust cost to set up, MONEY. Fill out the beneficiary form,do the right thing for the ones you love, and stop the bull about the SS numbers. If its needed ,it for the purpose of ID. ANDif more than one beneficiary you should give the percentage left to each. That's what I would do ,you do what you want.
  |     |   Comment #20
Demay, I see by your statement: "and stop the bull about the SS numbers.", apparently you don't know all that you think you know and pass along poor advice.

Not knowing, can't ask for, or wanting to supply S.S. of beneficiaries is a serious problem. Many financial institutions simply will not add beneficiaries without supplying them with their S.S. numbers even though it is not required by law.

Revocable Trust Accts. are a valuable tool to avoiding probate and additional lawyer fees and time delays. Trust Accts. cover much more than just CDs. Sometimes you have to spend a little money up front to save a lot of money in the end.
  |     |   Comment #21
No need to spend money with a up to date beneficiary form.
  |     |   Comment #22
Trust account. Do you mean either or survivor. Still need beneficiary form, if both were to die same time. Or it goes to estate, where would be left to lawyers to settle. And if will will is left can be contested, not if you leave a beneficiary form. But you do it your way.
  |     |   Comment #23
Ken, thanks very much for this clear, factual, well explained article on an important topic that certainly impacts a lot of folks, given the size of Cap One's customer base.

Your writing and reporting is one of the best things about this site -- in addition to the interest rate listings! :-)
  |     |   Comment #24
I spoke with Capital One today. They confirmed that they still do NOT allow living trust structures for new accounts.

As Ken mentions, ING Direct had provided this revocable trust option. Many of us were very pleased with this alternative - since discontinued by Capital One - although existing 360 accounts are at least grandfathered.

One major issue is that the newer, and higher-earning 360 money market account is unavailable for this account vehicle. The new POD arrangement does not meet the needs of many us, and I for one will not make a go of it.

However, the CSA stated that this is a priority for them, and that an internal timeline calls for a YE implementation date. That is good to know, but this has taken far too long and I am not sticking around to wait.
  |     |   Comment #26
I got a leaflet from Capital One 360 yesterday. It said that ACH limits will be changed based on certain criteria. You will have to communicate with the bank to see how it would impact your ability to transfer money in or out of the bank. Maybe ACH transactions are now looked with more scrutiny?
  |     |   Comment #27
Maybe ACH transactions are now looked with more scrutiny for online only banks?

Updated for clarity.
  |     |   Comment #29
No one has commented on my principal concern. My intended beneficiary, my son, lives abroad. Therefore his "US Physical Address" isn't in the US. Is this a stumbling block? Can I simply enter his true address, or do I need to substitute a friend of his is the US, or what?
  |     |   Comment #30
Isn’t his US address the same as yours? Where does he store his personal items in the US?
  |     |   Comment #31
Has anyone actually accomplished setting a beneficiary with this form? I notarized and faxed the form and never heard anything. I called after one, two, and three weeks. They have no idea where the form is (full of social security and account numbers). I did receive confirmation from my fax service that the fax was received. Their only solution was to ask me to re-fax the form. I did it with a cover sheet that gave them three days to process or all my assets would be moved to Ally. They have until Friday Oct 5th. Guess we'll see...
  |     |   Comment #32
Merely b/c your end reflects it was sent does not mean anything was received. Always confirm receipt of items, e.g. emails, faxes, snail mail, etc.!!!
  |     |   Comment #35
As stated the FAX server confirmed RECEIPT of the FAX, there is a handshake that occurs during the transmit/receive communication where the remote acknowledges that it has received the complete transmission. As old as the FAX protocol is, it is bidirectional.
  |     |   Comment #33
When Capitol One makes POD easily available, so will my deposits increase and not be moved.
  |     |   Comment #34
I think it was available at time of your comment writing. I noticed the self-service option on the website a few days ago.
Nancy S
  |     |   Comment #36
I have had a lot of problems trying to add a beneficiary to my Capital One CD since Feb 17. It is now April 6 and they continue to tell me "we're working on it." For over a month I was told to clean out my cache, sign on "incognito" and download other browsers. Nothing worked. I then used another computer (at the library) and, when I purchased a new phone, tried to add my sister as my beneficiary, but that failed as well. I am stuck in the CD but I transferred all of my savings to Discover Bank. The rate is 1/10 of a point lower, but I had no trouble adding beneficiaries.
casual observer
  |     |   Comment #37
Capital one on line program makes difficult to get a form if you do not have a printer. You cannot access your account on line accept from your personal computer. I tried to access my account from the bank I transfer funds from, to them. Their program would not give me access. It would have been convenient so as to get notary done. It is almost as though they do not what to deal with PODs.
  |     |   Comment #38
I can’t seem to get an answer to what I thought was a simple question . maybe someone out there knows...How does a beneficiary of a POD account get notified that there is money due them after the death of the account holder ?
  |     |   Comment #39
Answer to Lkcoss: a POD designation should be part of a broader estate plan. For most people, that would mean a living trust or a will. Before you mail in that POD form, make a copy and keep it with your estate planning documents. The executor of your estate should know he/she is to gather up your estate planning documents or binder upon your death (and where that can be found) and will see your bank account is collectable via POD and will do so by submitting a death certificate to the bank. The POD will then be triggered by that submission.
Don't Own Cell Phone
  |     |   Comment #40
When I called to make a beneficiary change they told me they will text me a code? Why do I need a cell phone to change beneficiaries on an online account that ,when I signed up needed only an internet connection??? When I log in I can see my account balance, see the acct. # as well as the Routing # and debit card #, I can transfer and withdraw money, But I can't change a beneficiary without a cell phone, either that, or fill out the form listed above and have it notarized, what about the email account I signed up with? The kicker is I'll have to go to one of their competitors offices to have it notarized.since Capitals nearest office is some 15 miles away(the reason for on line banking in the first place). MAYBE I SHOULD CHECK ON THEIR ONLINE BANKING OPTIONS???
  |     |   Comment #41
Don't have any email or cellphone with them but do have a credit card which I'm thinking about canceling since their recent hack. I have had to have an email for other credit cards (used an unique address) but after a few months I noticed to them that it was being discontinued and statements, etc. may be sent by US mail...which they did. May I suggest a more important question for CapitalOne is when are they going to notify those that were hacked? I will not do their work and log in to some site to see whether or not I was...it is their duty notify everyone and individually!
  |     |   Comment #42
I’ve been dealing with capitol one since early August to remit my mother’s account (she died July 2, z2019). Their ‘bank estate’ team is not directly accessible by phone, only email. And they do NOT respond to emails nor provide status. I proactively provided forms specified on the capitol one website, waited 2 weeks, called support and found they wanted another form, found a sample by googling and used it. About a week letter got my 1st email from them saying to fill out another form which I returned that day. That was Aug 21, 2019. It’s now Oct 1. I will never open an online-only bank account. If this were brick and mortar I could have walked in with all required papers and walked out with a check. I don’t know if they would have responded any faster with a POD or not. But their utter lack of communication and providing status is appalling.
  |     |   Comment #43
We are going through the same red tape. We are told that the “executor” of the estate has to be the one to distribute funds! I thought the POD option was to avoid probate. My husbands cousin left half of his 360 CD to his son and half to my husband. We called Cap 1 and sent their “estate team” an email immediately and were told a “packet” was being sent to us. We still haven’t received the packet.
  |     |   Comment #44
Designating PODs on accounts IS to avoid probate. That account is no longer part of the deceased's estate. It should be passed directly to the person or persons named as PODs.

Your problems just re-enforces me to NEVER have any financial dealings with Capitol One.
Zelda R
  |     |   Comment #46
But hey, you can go to a Café now! Because people don't want banks to handle banking, they want another place to grab coffee.
  |     |   Comment #45
tried faxing and kept getting failure notices. how can i just email my heneficiary forms.
Mama J
  |     |   Comment #47
Can you have beneficiaries with a capital one IRA account?
  |     |   Comment #52
Found this article after searching for Capital One trust accounts.. In 2021, they still require notarization of docs (self service still not available) and once my accounts were converted to Trust, I am not able to do electronic transfers within the accounts. :( Really, Capital One? You have to call them on the phone, get through to a human (within business hours) to make a transfer. I'm seriously considering taking ALL my business to ally. This is ridiculous. Just too painful to transfer all online accounts to Ally, which is giving me pause.
  |     |   Comment #53
Are there any banks besides Ally that don't require a social security number to add a beneficiary and that will accept a non-profit as a beneficiary?
  |     |   Comment #54
I am a 50% beneficiary on a Capital One account. I called and received a case number and sent the requested documents. I called again and they said the account had been dispersed into the Trust.. I was 50% as a beneficiary on the account and 10% beneficiary of the Trust. The account was dispersed into the trust by my nephew who is attorney-in-fact, alternate trustee, fiduciary whatever he decides to be depending on the situation. He has yet to give me an accounting. I hired an attorney to demand the accounting. I requested the accounting myself but he doesn't like me and blows me off no matter what I ask for. I could go to court and ask the Court to remove him, but I'm not that familiar with AZ law. I can't afford an attorney to represent me on everything. It was a $1,000 just to get a letter written. Help, I feel helpless. My nephew is aggressive, and doesn't seem to know what he is doing. So specifically can Capital One put the funds from an account I was beneficiary on into a irrevocable trust?

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