TN 14 (08-23)

GN 00603.010 Conserving Benefits in a Savings or Checking Account

A. Policy — savings or checking account

Funds not needed for the beneficiary's current maintenance may be deposited in an interest-bearing or dividend-bearing account in a bank, trust company, credit union, or savings and loan association that is insured under either Federal or State law. Any interest earned belongs to the beneficiary and not to the payee.

The funds must be deposited in an account that is titled to show the payee has only a fiduciary interest in the funds. A fiduciary account is an account established by a person or entity (the representative payee) for the benefit of another party (the beneficiary). The fiduciary nature of the account must be disclosed in the financial institution’s deposit account records. Funds deposited by a fiduciary on behalf of a beneficiary are owned by the beneficiary.

If a payee requests direct deposit, the title of the account or sub-account must show that the payee only has a fiduciary interest in the account or sub-account. The payee must maintain a separate account or sub-account for each beneficiary. For additional information on master/sub-accounts, see “Account Titles” (GN 02402.050) and “Direct Deposit for Representative Payee Cases” (GN 02402.055).

NOTE: Generally, a beneficiary's funds must not be commingled with the payee's personal or organizational operating funds. For exceptions to this policy, see “Account Titling” (GN 00603.010B.1.), “Collective Savings and Checking Accounts” (GN 00603.020) and “Exception” (GN 02402.055D).

B. Procedure

1. Account titling

The preferred account title is (Name of Beneficiary) by (Name of Representative Payee) representative payee.

Other forms of accounts that establish a fiduciary interest for the beneficiary are also acceptable. For example, (Name of Beneficiary) by (Name of Representative Payee) guardian, when the payee is the court-appointed guardian. The same format may be used for a court-appointed committee, conservator, or other representative, provided it shows that the representative payee is acting only in a fiduciary capacity for the beneficiary.

Proper account titling affords Federal Deposit Insurance Corporation (FDIC) protection with FDIC-insured financial institutions. Proper account titling also protects beneficiary funds from claims by a payee’s creditor.

For additional information, see –“Collective Savings and Checking Accounts” (GN 00603.020).

Exception for parents and spouses

There is an exception to the general rule that the account title must show the beneficiary's ownership of the funds in the account. All of the following conditions must be met for this exception to apply:

  • The payee is the spouse or the natural or adoptive parent or stepparent of the beneficiary;

  • The payee and the beneficiary live in the same household;

  • The payee requests direct deposit to the payee's personal checking account; and

  • The Field Office (FO) has verified with the payee that benefits will be used for the beneficiary's current expenses and there will be no accumulation of funds in the account.

This exception applies for any category of Title II or Title XVI benefits. The beneficiary does not need to be receiving benefits as a disabled/blind child or disabled adult child. The age of the “child” is not material. For additional information, see “Exception” (GN 02402.055D)

NOTE: The above titling exception does not apply to savings accounts. We allow the payee to deposit benefits for one or more beneficiaries to their checking account, if all of the exception criteria described above is met. However, the same payee cannot deposit the benefits for one or more beneficiaries to their own savings account. The payee must set up individual savings accounts for each beneficiary. Each savings account title must show beneficiary ownership. See the examples in GN 02402.055B.1.

IMPORTANT: Benefits should not accumulate in the spouse’s or parent’s checking account. The spouse or parent should move the accumulated benefits to a properly titled savings account.


Exception for State or local governmental organizational payees:

SSA may allow an exception to the general account titling rule for agencies of a State or local government when the State or local government’s accounting structure sufficiently protects beneficiary interests and clearly identifies what funds belong to the beneficiary. The requirements for allowing an account titling exception for State or local agencies serving as payees are described in “Collective Checking and Savings Accounts” (GN 00603.020D.2.).

2. Transfer of conserved funds

To facilitate accounting and transfer of conserved funds when payee services cease, we prefer that payees hold conserved funds in a separate account. Conserved funds payable to a capable beneficiary age 18 or older after payee services cease cannot be directed to a trust account for that individual even if the account was established before age 18 because conserved funds belong solely to the beneficiary.

C. References

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GN 00603.010 - Conserving Benefits in a Savings or Checking Account - 08/11/2023
Batch run: 08/11/2023