If you've been appointed as a representative payee for someone receiving Social Security or SSI, you need to set up a proper bank account. This isn't just a regular checking account—it has specific requirements to keep you compliant with SSA rules.
In this article, we'll cover:
- What a representative payee account is
- How it differs from a regular account
- How to title the account correctly
- Where to open a rep payee account
- How Purple simplifies rep payee banking
1. What Is a Representative Payee Account?
A representative payee account is a bank account used to manage Social Security or SSI benefits on behalf of someone else—called the beneficiary.
As a payee, you receive the beneficiary's monthly benefits and use them to pay for their:
- Housing (rent, mortgage, utilities)
- Food and household supplies
- Clothing
- Medical care and supplies
- Personal needs
The account must be set up and titled in a way that shows it belongs to the beneficiary—not to you personally.
2. How It Differs from a Regular Account
A rep payee account has several key differences:
Ownership: The funds belong to the beneficiary, not you
Titling: The account must include both your name and the beneficiary's name in a specific format
Usage: Money can only be used for the beneficiary's needs
Reporting: You may need to submit annual reports to SSA showing how funds were spent
Important: Never mix your personal funds with the beneficiary's funds. This can create compliance issues and make it harder to track spending for SSA reports.
3. How to Title the Account Correctly
The SSA requires specific account titling. The correct format is:
[Beneficiary's Name] by [Your Name], Representative Payee
Examples:
- "John Smith by Jane Smith, Representative Payee"
- "Mary Johnson by ABC Organization, Representative Payee"
Some banks may use slightly different wording, but the key elements must be present:
- The beneficiary's name
- Your name (the payee)
- The words "Representative Payee" or "Rep Payee"
4. Where to Open a Rep Payee Account
Not all banks make it easy to open properly titled rep payee accounts. Here are your options:
Traditional banks: May offer rep payee accounts but often require branch visits and paperwork
Credit unions: Similar to banks, with potentially more personal service
Direct Express: Limited payee features and no account customization
Purple: Online setup with proper titling built in, specifically designed for rep payees
When choosing where to open your account, consider:
- Ease of setup
- Proper account titling
- Fee structure
- Reporting and tracking tools
- Customer support that understands payee requirements
5. How Purple Simplifies Rep Payee Banking
Purple was designed with representative payees in mind:
Easy account setup:
- Open online in minutes
- Proper titling handled automatically
- No branch visits required
Compliance tools:
- Transaction tracking by category
- Easy-to-generate spending reports
- Clear separation of funds
No fees:
- No monthly maintenance fees
- No overdraft fees
- More of the beneficiary's money goes to their needs
Early direct deposit:
- Receive benefits up to 4 days early
- Better cash flow for monthly expenses
Multiple beneficiary support:
- Manage accounts for more than one person
- Keep funds properly separated