What is a Joint Account?

A bank account opened in the name of two or more persons is called a Joint Account. This would mean they can share access to a common account.

Different features of a Joint Account.

When two or more people want to operate through a single account they can opt for a Joint Account. The access to the account is shared by all the partners of the Joint Account equally, which means any one of the joint owners of the account can deposit money in the account, take out cash or issue cheques to other parties.

The Joint Account is in general opened among close relatives, business partners, couples, and between parents and children. It makes the money dealings between the partners easier and comfortable. Through the Joint Account the money transactions from a joint venture can be recorded and it gives us the clear picture of the financial status of the venture. The participants in a Joint Account have the option to restrict access, by requiring two signatures on cheques or withdrawal slips.

There is an element of risk in opening a Joint Account. However many people prefer it because the paying of bills and the other routine expenses can be made easier with the help of a Joint Account. When two or more people put money into the same account the huge sum will help the payment of the bills easier. Couples can share a Joint Account for their common expenses and can keep separate accounts for the other purposes. Elderly parents could open Joint Accounts with their grown up children, which would help to pay household bills. Such accounts would also help to avoid legal complications when the parents die.

Survivorship is one important aspect of a Joint Account. Individual accounts meet court restrictions and delays on the death of the account holder. In a Joint Account, when one of the parties dies, the survivor of the account is entitled to the balance, without any legal restrictions. One who enters a Joint Account should understand clearly that the partners have full authority to operate the account just like him. So a Joint Account is to be opened only with someone whom you trust. The Joint Account holders should be up-to-date with the current affairs of the account since they all are equally liable for the over drafts and bounced cheques.

The persons who are considering to open a Joint Account should know about its pros and cons.. The obligations of loans and automatic deductions from the account should be agreeable to the other persons since the amount is deducted legally from the Joint Account even though only one person owes the debt. Therefore, every Joint Account holder should keep track of the dealings in the account. The money from the Joint Account can be withdrawn by a single person without any prior notice. So Joint Accounts always work out among the most trusted ones. It is difficult to handle a Joint Account than an individual account. The level of trust is all that matters in a Joint Account.