A stakeholder holding funds or property subject to competing claims can deposit the disputed amount with the court and be discharged from further liability — federal statutory interpleader under 28 U.S.C. §1335 expressly permits a bond in lieu of actual deposit. The interpleader bond functions as the deposit: the stakeholder retains the funds, the court takes jurisdiction over the dispute among claimants, and the surety stands behind the deposit obligation.
A stakeholder — most commonly a life insurance carrier, a bank, an escrow agent, an employee benefit plan administrator, a title insurer — is holding funds or property to which two or more parties claim entitlement. The classic example: a life insurance death benefit with competing claims from a named beneficiary and a divorcing spouse. The stakeholder is not the rightful claimant, has no interest in the funds, and cannot safely pay either side without facing exposure from the other.
Interpleader is the procedural mechanism that solves the problem. The stakeholder files an interpleader action, names all claimants, and asks the court to determine who is entitled to the funds. The stakeholder is then discharged from further liability — having delivered the funds (or their bond equivalent) to the court, the stakeholder steps out of the litigation entirely.
Federal statutory interpleader under 28 U.S.C. §1335 expressly authorizes a bond in lieu of deposit. The stakeholder posts surety equal to the disputed amount; the court takes jurisdiction; the funds remain with the stakeholder pending judgment. This is significantly more useful than physical deposit when the funds are earning interest, when the disputed amount is large, or when the stakeholder is an institutional entity that cannot easily wire funds to the court registry.
Rule 22 interpleader — federal court interpleader under Federal Rule of Civil Procedure 22 — does not have the same statutory bond authority, but courts routinely accept bonds in lieu of deposit as a matter of discretion. Most state-court interpleader proceedings similarly accept bonds.
Federal interpleader operates on two tracks. Statutory interpleader under 28 U.S.C. §1335 confers federal jurisdiction with minimal-diversity citizenship among claimants (any two claimants citizens of different states), a stake of $500 or more, and either deposit of the stake or a bond securing the stake. The amount-in-controversy threshold is unusually low; the bond requirement is the operative procedural step.
Rule interpleader under FRCP 22 requires complete diversity (the stakeholder must be diverse from all claimants) or federal question jurisdiction, and the amount-in-controversy requirements of the general jurisdictional statutes apply. Rule 22 does not have an express statutory bond authority but bond-in-lieu-of-deposit is the accepted practice.
State interpleader operates under each state's procedural rules; most follow the federal Rule 22 model. Most state courts accept bonds.
Interpleader bonds are among the most underwriter-friendly court bonds in our practice. The stakeholder is, by definition, not the contesting party — they are a neutral party seeking discharge. The risk profile is exceptionally low because the stakeholder remains in possession of the funds, has no claim of right to them, and is using the bond to facilitate orderly judicial resolution of competing claims that have nothing to do with the stakeholder's solvency or operations.
Most interpleader bonds are written same-day for institutional principals — life insurance carriers, banks, escrow agents, title insurers, plan administrators — on standard underwriting terms without collateral. The application is brief: three documents start the file. The petition or complaint for interpleader, a schedule of claimants identifying the parties contesting the stake, and a statement of the stake (amount, source, current location of the funds).
For non-institutional stakeholders — escrow agents, individual fiduciaries, trustees holding contested funds — underwriting documentation is more involved but the bond remains routinely issuable. Filing is with the court of the interpleader action; for §1335 statutory interpleader, this is a U.S. District Court (and nationwide service of process under 28 U.S.C. §2361 makes the venue selection consequential).
Send the interpleader petition and the schedule of claimants. We write §1335 and Rule 22 interpleader bonds same-day for institutional principals.