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Capital One Adds Online Management of POD Beneficiaries


Last summer Capital One changed its beneficiary policy for 360 deposit accounts by allowing customers to designate up to 10 beneficiaries to each account. As I mentioned in my July blog post, one issue with the new policy was that customers could only add and manage beneficiaries with a paper form which not only had to be mailed/faxed, but it also had to be notarized. I’m happy to report that Capital One has added an online management feature that allows customers to add beneficiaries to their accounts online.

Unfortunately, not everyone in the nation can take advantage of adding beneficiaries online. According to Capital One’s support center, “Customers residing in the states of New York or Louisiana can view existing beneficiaries, but must submit a notarized form to make any changes.” If you live in those states or if you prefer to do things by mail, you can download the beneficiary form from Capital One’s support center.

Up to 10 beneficiaries can be added to each account. Once beneficiaries are named, the bank account will be referred to as a "Payable on Death" (POD) account.

Capital One’s New Online Beneficiary Management System

To add a beneficiary online, customers must first log into capitalone.com, and then select the account. From there, select “Account Services & Settings” menu and then click on “Manage Beneficiaries”. Capital One will then provide the following information:

Add Beneficiaries to Your Account

Your beneficiaries are the people who will receive the money left in your account when you and any other account owners pass away. You can designate up to 10 individuals as beneficiaries on each account. When all account holders pass away, we will distribute the remaining funds in equal shares. Until then, beneficiaries cannot perform transactions or view your account.

Any new beneficiary changes made online or by paper form will revoke all prior death beneficiary designations that you made for this account. Make sure that your most recent beneficiary designations for this account are listed here.

Select the “Add a Beneficiary” button, and an online form will be displayed. Fill in the identifying information on the beneficiary, click the check box and then click the “Add a Beneficiary” button to complete the process.

After you add the beneficiary, Capital One will take you to the list of beneficiaries for that account. From there you can add additional beneficiaries or remove a beneficiary or make edits to the information on a beneficiary.

One minor issue is that I can see no easy way to designate the same beneficiary to multiple accounts. You have to type in the full identifying information of your beneficiary for each account.

Social Security Number Still Required

In addition to name, address and birthdate, the online beneficiary form requires the beneficiary’s social security number. This can be a major issue for people who 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.

Beneficiaries Must Be Individuals

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.

Background On the Capital One Beneficiary Issue

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.

Benefits of Designating Beneficiaries On Your Bank Accounts

There are two important 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.

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  |     |   Comment #1
Doesn't banking law still require the beneficiaries names to be in the title of the account?
I know we had this discussion 10 years ago , and credit unions only require the letters POD in the title but there were some sad cases of banks that failed having misinformed customers that the names of beneficiaries could be elsewhere in the bank's record. while FDIC GC was telling me all the names had to be in the title of the account. For example, John Dough POD Mary Dough, Jim Dough etc to get extra FDIC coverage.

I haven't checked as to whether this was fixed when Congress made a fix for IndyMac account holders.
  |     |   Comment #20
To my knowledge the title of the account should be ITF/POD and the beneficiaries are logged with the bank. You must name at least two in order to increase FDIC insurance to $500K. If the bank permits the naming of beneficiaries the FDIC will recognize this as in essence you have created an informal revocable trust.
  |     |   Comment #2
They are finally listening to their customers but honestly this took way too long. I wonder how many accounts were lost by Capital One due to this nonsense.
  |     |   Comment #6
At least 5 CDs that went to Barclays because it took forever, several calls, emails, etc to add a joint owner to CD (we had to do joint because they couldn't do POD). I wasn't going through that again and I am not going to.
  |     |   Comment #3
Too little, too late.

For this very reason I have been progressively withdrawing resources from Capital One.

If they do not in a timely manner address the Social Security Number issue, or allow entities or non-profits as beneficiaries, then the account will be closed.
Revoked Option
  |     |   Comment #4
ING and their Revocable Trusts were not perfect, but they at least served the needs of a great many of their clients, including myself. You could in effect designate beneficiaries without restriction of the trust account. In a major setback, Capital One no longer allows Trust Accounts or even Trusts as Beneficiaries.

Capital One's only option for legacy ING trust accounts is their Online Savings Account, which currently earns a whopping 1%. An easy fix to at least maintain legacy customers would be to make that rate competitive. Their continued refusal to do has eliminated any holdovers.
  |     |   Comment #5
Just an FYI- Essential Savings is 1.5% I remember having to call them for the 1.5 rate.
  |     |   Comment #7
I have to wonder why anyone would keep money in an online savings account that pays only a 1% rate, such as Capital One 360, when you can easily get twice as much or even better at many other online banks and credit unions.
  |     |   Comment #8
Have to agree! I can understand why people would stay with a Bank they like and trust even if their top savings rate 10 to 25 bps less then the "Rate leaders", but why keep an account that pays 50% less interest? Ally and Synchrony Bank have money market accounts that earns half of what their top savings accounts.....Capital One does this in reverse.
Not ally
  |     |   Comment #9
I'm far from trusting ally, twice have had issues and twice their supervisors did differently than what they said they would
  |     |   Comment #10
Well over the past year, over 30 billion was moved out of non-interest bearing accounts. That is just a fraction (5%) of the total amount in non-interest bearing accounts.

  |     |   Comment #21
!) According to the FDIC instructions the Account Title must contain POD. ie: (John Doe Doe) The beneficiaries can be listed elsewhere in their documents.

2) However reading further in the FDIC instructions, the bank can list "POD" anywhere in the bank records.

I have called the FDIC on which is correct. They have said:
a. either way
b. account title
c. bank records

My impression is they don't know which is correct and don't want to spend time reaseaching.
  |     |   Comment #22
Correction (Typo):

!) According to the FDIC instructions the Account Title must contain POD. ie: (John Doe POD) The beneficiaries can be listed elsewhere in their documents.

2) However reading further in the FDIC instructions, the bank can list "POD" anywhere in the bank records.

I have called the FDIC on which is correct. They have said:
a. either way
b. account title
c. bank records

My impression is they don't know which is correct and don't want to spend time reaseaching.
  |     |   Comment #23
I see the PC police are out in full force again deleting comments for absolutely no reason......pathetic. I'm sure this one will be deleted as well. Pretty sad what our society has become.
  |     |   Comment #25
It's a hassle chasing rates. I keep my Capital One 360 accounts because I can use the Capital One branches and the Allpoint ATMs. I am in New York and do not even see the Beneficiary option when I log onto my account. Another bank with good rates is Sallie Mae Bank.
  |     |   Comment #26
Many banks allow charities as beneficiaries -- not the hucksters at this outfit. I would not trust them to even distribute proceeds after doing business with them.
  |     |   Comment #27
I needed a code from Capital One to add a beneficiary which they apparently only send by text, not Email or home phone. I updated my contact info to allow text messaging two week ago, but it is not yet in the system, and I still cannot receive the needed code. Are their tech people sitting around playing video games instead of taking care of business??
  |     |   Comment #28
As an IT worker myself, the answer to your question is yes.

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