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Joint bank accounts are powerful financial tools for a wide range of scenarios. From building responsible financial habits to sharing responsibilities, joint bank accounts offer a multitude of positive features. However, it’s important to note that some of these same benefits could work against you in certain situations. The information below can help you learn more about joint bank accounts—including joint checking accounts and joint savings accounts—and how these accounts with more than one owner may benefit you. Featured Partner Offer UFB High Rate Savings Minimum Deposit Requirement $0 Monthly Maintenance Fees $0 What Is a Joint Bank Account?Joint bank accounts have more than one owner and operate just like individual savings or checking accounts. The account owners may be business partners, spouses, couples or even parents opening up a bank account for a college-bound teen. All account owners have the same privileges, such as making withdrawals and deposits and writing checks or making debit card transactions. Pros of Joint Bank AccountsThe primary benefit of a joint bank account is that sometimes two or more heads are better than one. Sharing a joint bank account can provide different benefits for different relationships:
An added bonus for a joint account is that you may find it easier to meet your bank’s minimum balance requirement that’s necessary to waive fees and enjoy higher interest rates on your funds with more than one account holder. Joint accounts also can protect account holders in the event of death, as the majority are established with “rights of survivorship.” When one account holder passes away, this feature allows another joint account holder to retain access to the shared account. Without survivorship rights, legal procedures could restrict access to funds for funeral, estate and other timely expenses. In summary, joint bank accounts can simplify finances and offer virtually any relationship the ability to save and spend from a single account. This can, for example, make budgeting with a spouse easier than reconciling separate individual accounts each month. Cons of Joint Bank AccountsIn some situations, certain beneficial features of joint bank accounts could become complications. Here are some scenarios to keep in mind as you consider whether a joint bank account is right for you:
If you’re considering opening a joint bank account, it’s vital to trust those who share ownership. Without trust, a joint account could create more headaches than help. How Do Joint Bank Accounts Work?A joint bank account works similarly to an individual bank account, except that a joint account has two or more owners that own the account equally. At first glance, joint bank accounts may be something you associate with married couples. Yet owners of joint accounts can be anyone, including spouses, siblings, friends or business partners. With joint accounts, all account holders share equal ownership over the assets in the account. Anyone can deposit or withdraw funds at any time without the permission of any other account holder. How to Open a Joint Bank AccountTo open any type of joint account, you and the joint account holder will need to provide certain documentation to the bank where you’ve chosen to open the account. What You Need To Open a Joint Bank AccountTo open a joint bank account, all account holders must complete the required account application. Each applicant must also provide a valid government-issued I.D. (Social Security card, driver’s license, state-issued I.D. card, passport). Things to Know When You Open a Joint Bank AccountEach account holder with a joint bank account is individually insured up to the FDIC (Federal Deposit Insurance Corporation) limit of $250,000 per depositor, for each account ownership category, at a bank. Credit union accounts receive the same protection from the NCUA (National Credit Union Administration). This translates to a single joint account, with two owners, enjoying up to $500,000 in protection. An individual account would only enjoy half that protection in the event of a bank or credit union failure. Who Owns the Money in a Joint Bank Account?Money in joint bank accounts belongs equally to all owners of the account. At any time, any account owner can make deposits or withdrawals from the account up to the bank’s maximum daily limits. In the event that one of the account owners dies, the money in the account doesn’t have to go through probate. Instead, the money and account ownership passes directly to the other account holder(s). However, it’s important to note that the surviving account owner may have to provide a copy of the deceased account owner’s death certificate to the bank to transfer ownership of the assets. How to Close a Joint Bank AccountIt’s a simple process to close a joint checking account or joint savings account. Here’s a simple process to follow:
Is a Joint Bank Account Right for You?As you weigh whether a joint bank account may be right for you, have a candid conversation about finances with the prospective account holders. All account holders should agree to the broad terms, like how the money will be used and who’s responsible for paying which expenses with the account. You also may want to agree on regular intervals to review your shared finances. Having a schedule can play a crucial role in reminding all account holders that each has a say and helping head off financial complications before they become unmanageable. You may find that a joint bank account is a part of your financial plan that you use in conjunction with individual accounts. For example, couples might choose to pay expenses like housing and utilities out of a joint account, but prefer to pay for their own expenses out of individual accounts. The Bottom LineNow you’re equipped with the details of joint bank accounts. As you decide whether a joint account is a fit for you and your scenario, remember to keep conversations with account holders open and honest. Trust is the most valuable asset you’ll ever invest in a joint financial account. Find The Best Online Banks Of 2022Frequently Asked Questions (FAQs)Can you open a joint bank account without the other person present?When opening a joint account in person, all account owners will need to be present. When opening a joint account online, you’ll need to provide essential identification information for all account holders virtually. How do you add a spouse to a joint bank account?Simply visit or call your bank and complete the necessary paperwork to add a spouse to your account. You’ll need to provide their identification and may need to provide additional information. How do you close a joint bank account without the other person?It usually only requires one account holder to close a joint bank account since all account owners have equal privileges on the account. Your bank or credit union can provide their specific requirements. How do you transfer money from a joint account to an individual account?Many banks and credit unions offer online transfers from joint to individual accounts if both accounts are at the same bank. To transfer money from a joint account to an individual account at another bank, you can link the external account and then initiate an ACH transfer, which may take three to five business days to complete. What do you need to create joint account?To open a joint account, you'll need:
Identification for both account owners, like a driver's license, state ID or passport. Personal information for both account owners, including your date of birth, Social Security number and current address.
Can I add someone to my bank account to make it joint?Most often, joint accounts are held by one individual and a spouse or partner, family member or business partner, but it's possible for any two people to open a joint bank account together.
Can you turn a single account into a joint account?You can switch both sole accounts and joint accounts into a joint account. You can't switch a joint account into a sole account until the second party has been removed from the account.
What are the 2 types of joint accounts?In the United States, there are typically two types of joint accounts: survivorship accounts and convenience accounts.
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