Payable on Death Accounts

MEFCU is committed to taking care of not only our members, but their loved ones. With a Payable on Death Account, you can make sure that finances are the last thing your family needs to worry about in devastating circumstances.

  • $50 minimum balance required

  • Earns dividends from the day of deposit to the day of withdrawal

  • Dividends paid quarterly

  • Federally insured up to $250,000; see below table for more information on insurance coverage of these accounts

  • Access to your account information online

Insurance Coverage on POD Accounts

Payable on Death (POD) accounts are also known as informal revocable trusts.

Share insurance coverage for revocable trust accounts is provided to the owner of the trust. However, the amount of coverage is based on the number of beneficiaries named in the trust and, in some cases, the interests allocated to those beneficiaries, up to the insurance limit. A trust beneficiary can be an individual (regardless of the relationship to the owner), a charity, or a non-profit organization (as defined by the IRS).

Revocable trust coverage is based on all revocable trust deposits held by the same owner at the same credit union, whether formal or informal. If a revocable trust (formal or informal) has more than one owner, in order for each owner to receive NCUSIF coverage, each owner must be a member of the credit union in their own right. If a revocable trust account has more than one member-owner, each member-owner’s coverage is calculated separately, using the following rules:

  • Revocable Trust Share Deposits with Five or Fewer Beneficiaries — Each member-owner’s share of revocable trust deposits is insured up to $250,000 for each eligible beneficiary named or identified in the revocable trust (i.e., $250,000 times the number of different beneficiaries), regardless of actual interest provided to beneficiaries.

  • Revocable Trust Share Deposits with Six or More — Each member-owner’s share of revocable trust deposits is insured for the greater of either (1) coverage based on each eligible beneficiary’s actual interest in the revocable trust deposits, with no beneficiary’s interest to be insured for more than $250,000, or (2) $1,250,000.

Note: Determining coverage for revocable trust accounts that have six or more beneficiaries and provide different interests for the trust beneficiaries can be complicated. Contact the NCUA at 1-800-755-1030 if you need assistance in determining the insurance coverage of your revocable trust.

POD Account Example: Bill has a $250,000 POD account with his wife Sue as beneficiary. Sue has a $250,000 POD account with Bill as beneficiary. In addition, Bill and Sue as co-owners, also both members of the credit union, have a $1,500,000 POD account with their three named children as beneficiaries.

Account TitleAccount BalanceAmount InsuredAmount Uninsured
Bill POD to Sue$250,000$250,000$0.00
Sue POD to Bill$250,000$250,000$0.00
Bill and Sue POD to 3 children$1,500,000$1,500,000$0.00
Total$2,000,000$2,000,000$0.00

These three accounts totaling $2,000,000 are fully insured because each member-owner is entitled to $250,000 of coverage for each beneficiary. Bill has $1,000,000 of insurance coverage because he names four beneficiaries — his wife in the first account and his three children in the third account. Sue also has $1,000,000 of insurance coverage — $250,000 for each of her beneficiaries — her husband in the second account and her three children in the third account.

When calculating coverage for revocable trust accounts, keep in mind that:

  • Coverage is based on the number of beneficiaries (and, if the account has six or more beneficiaries, the interests of the beneficiaries) named by each owner. Additional coverage is not provided for the trust owner(s). For example, if a father owns a $750,000 POD account naming his two sons as beneficiaries, the father’s account is insured for $500,000 because he is entitled to $250,000 of deposit insurance coverage for each eligible beneficiary he has named in the account. The remaining $250,000 is uninsured. A common misconception is that deposit insurance is determined by counting or adding the total number of individuals listed on a POD account. Coverage is NOT calculated as owners plus beneficiaries times $250,000.

  • NCUA insurance limits apply to all revocable trust deposits — including all POD/ITF and living trust accounts — that a trust owner has at one insured credit union. In applying the $250,000 per beneficiary insurance limit, the NCUA combines an owner’s POD accounts with the living trust accounts that name the same beneficiaries at the same credit union.

  • NCUA insurance is provided to any co-owner that is a member of the credit union. If a co-owner is not a member of the credit union, coverage is not provided and only the primary member-owner’s interest in the funds is insured.

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