A joint account is a bank or brokerage account that is shared by two or more people. Joint accounts are most commonly used by relatives, couples, or business partners who are familiar with and trust each other.
A joint account works similarly to a standard account, such as a checking or savings account, in that it allows anyone named on the account to access the account’s funds. All owners have the ability to withdraw cash, write checks, and make online payments.
How Do Joint Accounts work?
Joint accounts function similarly to regular accounts, with the exception that they can have two or more authorised users. Permanent joint accounts, such as one for a couple into which their salaries are deposited, can be established. The account could also be temporary, such as between two parties contributing funds in the short term.
Bank accounts held jointly by two people can have a “and” or a “or” between the account holders’ names. If the account is designated as a “and” account, both/all parties must sign in order to gain access to the funds. If the account is a “or” only one party must sign.
Deposit accounts at banks, including checking and savings accounts, credit cards, and other credit products such as loans, lines of credit (LOC), and mortgages are examples of jointly held accounts. The joint status grants full access to all those listed on the account, but also assumes responsibility for any payments, fees, or charges incurred.
It is just as simple to open a joint account as it is to open a single account. When the account is opened, both parties should be present at the bank, whether it’s a deposit account or another product like a mortgage or loan. Adding a secondary or authorised user to a credit card is the same as opening a joint account. In most cases, the signature of the second party is required.
The Uses and Advantages of Joint Accounts
Opening a joint account may also be advantageous for newlyweds who are combining their finances. Couples may find it more convenient to have a single account into which they can deposit their paychecks and pay bills or other joint debts.
If a senior cannot pay their bills or do routine banking on their own, they may find it useful to add one of their children or another authorised user to their accounts.
Can you remove someone from a joint bank account?
If you want an account in your name only, you must close the current one and open a new one. We will make an exception if the person in question is deceased.