What is POD? What rights does the “mail to” registrant have?

Thursday, August 26th, 2004
Categorized as: Savings Bond registration changes

Who may cash a Savings Bond that has three names listed on the face as follows: TO: Levi Doe, Mail to: Mary Doe, or: Reggie Doe (can the “mail to” person cash the bond – what if this is actually the person who purchased the bond)? If a bond is made out To: Mary Doe POD Levi Doe can either cash it? What is POD? If only two names are on a bond (with an “OR”) can one of these people change the bond names to themself and someone else? I’m asking this in case of the death to one or any other reason owner wishes to change second name?

Tom’s response

The “mail to” person is not a registered owner and can’t cash the bond. If that person actually purchased the bond, a gift occured at that moment that can’t be taken back.

If there are two names with POD (payable on death), the first person is the owner and can cash the bond. The second is the beneficiary and can’t cash the bond unless the owner dies. The owner can change the beneficiary whenever he or she likes with no consequences.

If there are two names with OR, they are co-owners and either can cash the bond without the knowledge or permission of the other. If one of the co-owners has died, the remaining co-owner can add someone as either co-owner or beneficiary.

If there are two living co-owners, you can change one, but it may create a taxable event.

My book has a lot more information about all the ins and outs of registration changes.

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On September 30th, 2008 Nancy said:

Hi – My kids have savings bonds with me as POD. Can I cash them in for them now?

On October 1st, 2008 Tom Adams said:

Nancy – you can’t cash the bonds as the POD, but if the bonds were issued more than one year ago, your kids can cash them, although they may need a custodial parent (you) to sign for them.

Tom Adams

On October 3rd, 2008 John Bowman said:

My mother bought ten $50 series EE bonds for my son in 1983. They have his name on them with her name as POD, but have her SSN on them with her address. (She has since passed away). What does he have to do to redeem them? Thanks

On October 6th, 2008 Tom Adams said:

John – As the article above points out, there is no legal meaning to your mother’s SSN or address being on the bond. All your son has to do is take the bonds to his bank and ask to have them redeemed. More info here.

On December 17th, 2008 Carolyn said:

My aunt just passed away and left me savings bonds with my name listed for POD. The problem is she had my name put on the bonds with just my first and middle name no last name. What do I do ? My bank says they are invalid this way.

On December 18th, 2008 Tom Adams said:

Carolyn – the bonds are NOT “invalid” – the person you talked to at the bank didn’t know what to do and just said that to get you to move on.

You will be able to get your money. One option, assuming you have an account there, is to return to the bank, talk to someone else, and don’t let them move you on. Just keep asking, “What do I have to do to get this bond redeemed”? Eventually they’ll probably call their Savings Bond contacts and find out for you what you need to do.

Alternatively, you can use the “Ask the Treasury” link above to find out yourself, but in that case you still have to convince the bank to do what the Treasury suggests.

Tom Adams

On March 24th, 2009 ok said:

i have several EE savings bonds that my grandmother has left for me, some say pod and then my name some say pod and then her name some are to me, i’m curious as to how this will work out when i go to redeem them

On March 25th, 2009 Tom Adams said:

OK – The ones that have your name first will not be a problem, no matter what it says after your name.

The ones that have her name POD your name will require a copy of her death certificate.

If there are some that have a third person’s name POD your grandmother (your message isn’t clear about that), they belong to the third person, not you.

Tom Adams

On April 7th, 2009 Chuck Wozniak said:

My mother purchased an EE savings bond shortly after our daughter was born in 1990. My mother was listed as the owner and our daughter was listed as POD. My mother passed away a number of years ago. Our daughter redeemed the bond in 2008 after turning 18 and used some of the funds to pay for college tuition. Does she qualify for any kind reduction on the taxable amount of the bond interest?

On April 7th, 2009 Tom Adams said:

Hi Chuck – No, she’s not eligible for the deduction. Details are here.

Tom Adams

On July 3rd, 2009 Todd said:

My wife was just given 35 Series E Bonds with a face value of $25 purchased in 1977-1979. They are owned by her Dad with a POD to her. Her dad’s federal tax rate is only 15% because his pension and social security (both low overall amounts below $26,000 respectively) are not taxed at New York State level. Our income tax rate is higher than 15%. I think he should cash in bonds now and pay the income tax rate of 15% on the interest earned on these bonds. This is more advantageous than us waiting until he goes to greener pastures and us paying the government more money. I also believe taxes will be going higher in this country which means we should get the money now. Does this sound logical? Also, if he died we would still have to pay the income tax on the bonds right? There is no escape of estate taxes with these bonds I believe. I also don’t believe her Dad would get hit with a penalty if he cashed these bonds right?

On July 6th, 2009 Tom Adams said:

Todd – your analysis makes perfect sense.

The E bonds are of no value to your wife unless her father dies. Giving the government an interest-free loan by holding on to these bonds until then is a big financial mistake.

Financially, the best thing is for him to cash the bonds, hold back what he needs for taxes, and then reinvest what’s left or give it to your wife.

It’s always amazing to me that people would rather have a tax-free penny than a taxable dollar.

The IRS would say that he owes a late payment penalty on the bonds that stopped paying interest in prior years, as that interest should have been added to his income in those years. They would be looking for amended tax returns for those years. As a practical matter, however, it all depends on what year the bank puts on the 1099 when the bonds are cashed – and they almost always use the current tax year.

Tom Adams

On August 17th, 2009 BILL NIENDORFF said:

I have savings bonds for my son’s college education bought in 1994-95 which are in my name but have my son listed as POD. He needs to use them now, but the bank did not cash them for him because of the POD requirement.

What, if any change do I need to make so that the bonds can be cashed by him?

On August 18th, 2009 Tom Adams said:

Bill – As the bonds are registered now, you may be able to get a tax deduction if you cash the bonds yourself. There are lots of limitations to this, but check out my page on the Savings Bond education deduction.

If that doesn’t work for you, the IRS expects you, not your son, to pay the taxes on the interest the bonds have earned. However, the Treasury will let you add your son as a co-owner and if your son then cashes the bonds he will get the 1099-INT. This takes several weeks. If you want to go this route, there’s more info here.

Tom Adams

On November 20th, 2009 Tom said:

I found some EE savings bonds from 92-94 but my mothers name is the recipient and i am the POD. I haven’t seen or spoke to her since i was 4 and when i was 15 she signed her legal rights as a mother away. So what can I do here?

On November 23rd, 2009 Tom Adams said:

Tom – Your mother is the legal owner of the bonds. If she dies they will become yours, although you’ll need a copy of her death certificate to cash them.

The bonds will earn interest until 2022-2024. They give you a reason to contact your mother. You may not want to do that now, but there’s no harm in just holding on to the bonds to see if your feelings change as you grow older.

Tom Adams

On January 2nd, 2010 Traci said:

My son is 18 years old and has 8 series EE savings bonds and 4 series I bonds showing me,his mother, as POD. The problem is that my son is no longer a part of my life. He basically disowned me and I do not even know where he lives. Is there anyway for me to cash these bonds as I am my only source of income and struggle with day to day needs. There must be some sort of exception to these bonds and my name IS on them. Please respond. Thank you.

On January 4th, 2010 Tom Adams said:

Traci – You will need your son’s death certificate to cash the bonds. While he’s living they belong to him, not to you.

Tom Adams

On February 1st, 2010 jcompton said:

I am looking into the process of changing POD only (no change to actual ownership) on some E/EE bonds.

Am I reading the Treasury Direct article “Series EE/E Savings Bonds Tax Considerations” correctly? It seems to be saying that if you remove a POD, the POD gets hit with a 1099 for the accumulated interest. Although I understand the rationale for dunning people who are abandoning *ownership*, a POD might well never have known they were even eligible to receive the bond in the first place. In effect, they would be getting a 1099 because of a transaction they were powerless to prevent.

Am I missing something? The relevant portion of the site is quoted below. They use the term “surviving beneficiary”, which I presume means “a POD who is still alive.”

“In some cases, when you have your savings bonds reissued, the transaction will be considered a reportable event for federal income tax purposes.

These events include:

* The name of a surviving beneficiary, or other person entitled to ownership doesn’t appear on the reissued bond as owner or principal co-owner.
For taxable reissues, the person giving up ownership of the bonds will be sent an IRS Form 1099-INT shortly after the end of the tax year. This form will show the interest earned to the date of the reissue transaction. If the form shows interest earned and you have deferred reporting interest, you report interest earned on those bonds as income on your taxes for the year the reissue occurs.”

On February 2nd, 2010 Tom Adams said:

JCompton – You are misreading this. The POD is taxed only for changes after the owner dies. That would make the POD a surviving beneficiary. In this case surviving means the POD is alive but the owner isn’t.

If the owner is alive he or she can change the POD with no tax consequences to anyone.

Tom Adams

On February 2nd, 2010 jcompton said:

Ahah! That makes sense and is consistent with their other practices. Thank you for clarifying.

On February 26th, 2010 Victoria said:

I have an EE savings bond but it has my biological father’s name on the bond. However, we no longer speak to each other and the bond itself was a gift to me. My name is under the POD but I was wondering if I’d still be able to cash it in even though the POD is the only spot my name is printed.

On February 27th, 2010 Tom Adams said:

Victoria – Assuming the bond names your father first, then POD, then your name….your father is the owner and you are the beneficiary. You have no rights to cash or change the bond while your father is still alive. The “gift” is meaningless unless he has passed.

Tom Adams

On March 30th, 2010 Charlene said:

My father has three (3) series “I” savings bonds and the POD name is spelled incorrectly. How do I correct the name and add her sibling to the account?

On March 31st, 2010 Tom Adams said:

Charlene – A Savings Bond can only have two names on it, so you can’t have the father and both siblings on one Savings Bond. You could have one sibling’s name on one of the bonds and the other’s name on the two remaining bonds.

The form to do this is the same as the form to fix the spelling – there’s more info here.

Tom Adams

On May 11th, 2010 John Bricker said:

I have several EE Bonds from 2001 and 2003 that were gifts from my father to my children. My children are 15 – 17 years old. My kids have asked me to cash the bonds for them. Some of the bonds I am listed as an “or” and some as a “POD” Can I cash these for them.

On May 12th, 2010 Tom Adams said:

John – It would be better for you to take the bonds and the kids to a bank and have them cash their own bonds. It would be a good experience for them.

Tom Adams

Comments Closed

June 1, 2010

After six years, over 400 posts, 3,680 real comments, and over 90,000 spam comments (thank you, Akismet, for making managing a blog with comments possible), I am closing public comments on Savings-Bond-Advisor.com. I will contine to update the main articles on this site, but not the comments.

Virtually every question about Savings Bonds has been asked and answered on this site multiple times. Use the search feature (see the box in the gray area near the top of this page) or the detailed menu on the lower part of the home page to find the information you're looking for. If you have a copy of Savings Bond Advisor, you can ask me a question here.

Tom Adams

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