Tuesday, 11 February 2020

Joint bank accounts allow multiple people to use one bank account at the same time.

When properly set up and managed, they can make daily money management convenient and offer many other benefits for couples, families, business partners, roommates and even friends.

What is a joint account?

A joint bank account is “owned" by two or more people, and all owners have equal access to account funds.

Joint checking accounts are commonly used by married couples. They can also be used as household accounts with multiple family members having access to the account. Other deposit accounts, including savings, Money Market, Certificates of Deposit (CDs) and investment accounts can also be jointly held.

How does a joint account work?

In the case of checking accounts, each account owner has full access to account funds and features. For example, each one can have a debit card for withdrawals and can make deposits into the account, including direct deposits. Other types of deposit accounts, such as savings accounts, work the same way, with both owners having access to the funds and the ability to make deposits, withdrawals and transfers.

Who can share a joint account?

Anyone can share an account with another person; it's not restricted to only those who share a household. Partners in a small business could choose to set up a joint checking account for their business. Adult children can have a joint account with a parent, roommates can have access to a joint account to manage their shared expenses, etc.

What are the benefits of joint accounts?

With joint accounts, all owners can see all account information including balances, deposits, purchases, transfers and more. This transparency can be helpful as joint account owners manage expenses, pay bills and work toward financial goals.

Joint accounts can also have “right of survivorship," meaning that if one of the co-owners dies, the other owners automatically gain ownership of account funds.

Having one account can also cost less and be easier to manage than multiple accounts.

How do you open a joint account?

To open a joint account, each applicant must provide personal information, such as proof of address, photo identification and a Social Security number.

In addition, most banks require applicants to pass a credit screening before they can open an account. If you pass the screening, but one of your co-applicants does not, he or she may not be able to be a co-owner on the account.

Some banks allow existing account owners to add another person to their account, such as a parent adding a child. However, the added person would still need to provide proof of address, identity, date of birth and a Social Security number.

Is a joint account right for you?

A joint account can make daily financial management convenient for families, roommates or anyone who shares money and expenses with someone else. However, for joint account ownership to work, it's important for account co-owners to have a high level of trust, clear expectations and open communication with one another. 

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