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Everything You Need to Know About Joint Bank Accounts (Before You Even Think About Making One)
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Nicole Pecoraro
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A joint bank account is a shared financial account. 

There are no limits to whom you decide to share your banking access, and for many people, "joint" means different things. It could be an account between partners, spouses, parent and child, friends, or business partners depending on the circumstances. Deciding to share an account with someone means sharing more than just money. 

You're sharing your transaction history, your bills and your statements. You're giving them access to your account and everything else that comes with it. So regardless of who is making the deposits, anyone with access is allowed to withdraw money. 

There are different rules that apply to different types of joint accounts regarding what happens to the funds in the event of divorce or owners passing, so when choosing an account it is wise to consider the various possibilities for the future as well as your local and state laws in that regard to keep yourself (and your money) protected. 

How does a joint account work?

The benefit of having a joint account for private partnerships/relationships is that each owner has equal access to the funds to pay bills, make deposits, schedule payments or pay employees. You'll need everyone's signature to open the account, and then each person granted access will have free ability to deposit, withdrawal, spend, or pay as they see fit. Every person with ownership on the account will have access to the transaction and payment history as well as any benefits that come with the specific account you've chosen to open. 

What should I consider before opening a joint account? 

If this is a business, consider what happens if you were to pass away. Do you intend to leave your money to your co-owner? If not, you may want to believe that ahead of time. Additionally, if you or your co-owner were to pass away, and there is not a protection for this, your money could be tied up in probate until the financial situation is squared away. That could lead to late payments of bills or wages to employees if you're not in the position to cover these personally until your money is released. 

When planning to join accounts with a boyfriend, girlfriend or spouse it's important to remember that it doesn't matter who deposits the money into the account, each owner has equal rights to take money out. It's crucial that you trust the individual you're agreeing to share your finances with, as if something goes awry, you're going to be on the hook for any delinquencies as much as they are. 

Can I open a joint bank account online?

Most banking institutions now allow you to open joint accounts online with the personal information of each additional owner. However, in many cases, it's much easier to have the details of the different account options available to your situation discussed with a banker so you can verify you're choosing the best and right account for you and your partner's/spouse's needs. 

Should couples have joint or separate bank accounts?

Trust is a significant factor when deciding whether or not to share your finances with someone. Only you can decide if sharing an account is best for you. If you're in a situation where you are sharing all of your bills, your rent/mortgage, and daily spending, it may be more convenient and practical for you to share an account as well. 

If you have business expenses, personal debts or payments received that you don't intend to or want to share with your partner, it's likely best to keep things separate. Weigh the pros and cons and consider who benefits from joining your accounts. If the answer isn't both of you, might be best to keep things "Dutch" for now. 

Can you have a joint bank account if you're not married?

You can share an account with anyone you choose. You do not have to be married — you don't even have to be related to open an account with another person. All you need is an agreement with each other, and more importantly, with the bank. You'll need capital to open the account, and a signature from both (or all) of you to allow each other the right to access capital and have a full say in how it is spent or withdrawn without any other party's consent. 

Who owns the money in a joint bank account?

Each individual owner of the account owns all of the capital. That means, if I make a large deposit into a joint checking account shared with my boyfriend today, tomorrow my boyfriend can go and withdrawal every penny and he would have every right to do so. The same rules apply to if he were to make a large deposit and I chose to remove the money and spend it as I saw fit. Legally, the money belongs to both of us, regardless of whose name was on the check that was cashed bringing the dough into the account in the first place. 

What are some of the risks of opening a joint bank account?

Having fair and even access makes daily management of finances easier overall, however, while both parties have equal ownership that also means that both (or all) parties are also responsible for any mismanagement of the finances that takes place. If one individual drains the account and checks are bouncing driving up overdraft fees, all owners will be responsible for the repayment and retribution required to make the account squared away or risk having a negative impact their credit report. 

How do I close a joint bank account?

To close an account, most banks require that at least one account holder goes into the branch to do so. Typically, the account must have a zero dollar balance to close out, so that would mean that one or all of you must remove the money before being allowed to close the account completely. 

Theoretically, that also means that someone could empty the account, close it, and walk away with whatever funds are available without the direct consent to do so. However, technically, they did have consent because that's what you agreed to when you signed up for a joint account. 

Last word

Having a joint account can make your day to day transactions far more convenient. Paying bills, paying employees or budgeting money with others is easier when you have a big picture of what you're working with every month. There are also great risks to sharing your finances with another person (or persons), so before doing so be sure to do your homework. Be certain you're sharing your accounts with individuals you can trust and know your rights and terms before you sign on the dotted line. 

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