As the name states, the joint account is a type of account in a bank that you can willingly share with another person. A joint account is made when two people willingly want to open an account together. This type of accounts is seen in couples, relatives, and families. These accounts can also be made with business partners, only if you trust your business partner enough.
There are various types of joint accounts that you can find in the bank. What are they? Let’s find out.
Types Of Joint Accounts
There are 6 types of joint accounts that you can find in any bank. Below you can find the different types of joint accounts.
i. Either (Or) Survivor Type Of Joint Account
One of the most common types of joint accounts that you can find in the bank is the Either (Or) Survivor type of joint account. In this type of account, both the primary account holder and the secondary account holder can operate the account. Here, both the account holders can access the amount and transfer the funds into the account.
In case of death, the money in the account will go to the survivor or the account holder who is still alive. However, if there is a nominee, then the share of the money will go to the nominee after the living account holder’s death.
ii. Anyone (Or) Survivor Type Of Joint Account
Though this joint account is similar to the Either (Or) Survivor type, there is a slight difference. Any two individuals can open a joint account of this type, but more people can also operate the account apart from them.
In simple language, if you are opening a joint bank account with your spouse, but you also want your mother or your kids to operate the account, this type of joint account is suitable for you.
iii. Former (Or) Survivor
The Former (Or) Survivor type of joint account is the joint account where only the primary account holder can operate the account. Though the account will have 2 account holders, only the primary account holder can operate it.
The secondary account holder can only operate this type of joint account, only when the primary account holder dies; in such cases, the secondary account holder can also transfer the balance in his/her name.
iv. Later (Or) Survivor Type Of Joint Account
The Later (Or) Survivor type of joint account is similar to the Former (Or) Survivor type of joint account, yet it has a slight difference. In the Later (Or) Survivor type of joint account, the secondary holder can only operate the bank account.
Meanwhile, the primary account holder cannot access the bank account until the secondary account holder is alive. The primary account holder can operate the account only after the secondary account holder dies.
v. Jointly Type Of Joint Account
As the name suggests, the joint type of account is for more than two individuals who want to make a joint account. Here, all the account holders are eligible to handle the account and use it. However, if one of the account holders dies, then the account is blocked, and the remaining balance is then given to the survivor.
vi. Jointly Or Survivor Type Of Joint Account
More than two individuals can open a joint account in this particular type of joint account, where all the account holders can operate in. Moreover, the account is still operational even if one of the account holders dies. In this case, the survivor can handle the account and transfer all the balance amount to his/her account.
Opening A Joint Account
Opening a joint account is similar to that of a normal account. You and your partner need to fill up all the necessary forms that the bank will provide. The forms you will fill are based on the type of joint account you are selecting.
Furthermore, you need to provide the necessary documents, like identity proof, email, phone number, after which both of you need to sign the papers. Make sure to read the terms and conditions before signing the papers. The terms and conditions are different for different types of joint bank accounts.
It is also necessary to discuss with your partner and decide who will be the primary account holder and who will be the secondary account holder.
Working Of A Joint Account
A joint account works similar to that of a normal bank account, but with more account holders. In a joint account, two individuals are operating the account instead of one. A joint account is made where two individuals can add their savings for the future or even deposit their salaries in it.
In a joint account, two individuals have an “or” or an “and” between their names, as per the type of joint account they have chosen. As stated above, if there is an “and” both the individuals can operate the account and an “or,” only one of the account holders needs to sign all the cheques for the account.
When two individuals are opening a joint account, they need to be present for every occasion. For example, in applying for a loan, both the account holders need to be present in the bank, irrespective of their account type. The same goes for credit cards, mortgages, and other cases where the account holders’ signatures are required.
Rules For Joint Accounts
There are certain rules which the account holders must obey while operating a joint account. The rules for a joint account are stated below.
- Each of the owners has the right to withdraw, deposit, and even transfer funds.
- The money in the joint bank account belongs to everyone who is a part of the account.
- All the account holders need to be present in case of applying for a loan or credit card.
- No matter which type of account holder an individual is, he/she has the right even to close the account entirely.
- No account holder can delete or remove another account holder from the joint account without his/her consent.
Withdrawing Money From Joint Account
If you wish to withdraw money from your joint account, you need to follow the following steps.
- Ask the other account holders to remain present in the bank while you are withdrawing money from it.
- Next, you need to fill a withdrawal slip in the bank. Here, you have to enter the date of withdrawal, the account number, and the amount you want to withdraw. All the account holders should sign the slip; else, the withdrawal will be invalid.
- Give the withdrawal slip to the bank and provide them with all the necessary documents. The necessary documents will include your ID proof, which should have your name, photo, and signature. The bank will then verify your signatures and approve the withdrawal
What Happens When One Account Holder Dies?
When one account holder dies, the account is then handed over to the other account holder. However, the same is not applicable in all cases. If a joint account has more than two individuals, and one of them dies, the whole account is suspended, and the money is then given to the rest of the account holders in an equal amount.
Another case involves where, if one account holder dies, another account holder will get half of the balance. In contrast, the other half is given to the late account holder’s family or the nominee.
To claim the amount, the account holders must present a copy of the deceased account holder’s death certificate, after which the process will start.
Deleting Name Of An Account Holder From The Joint Account
If you wish to delete an account holder’s name from the joint account, you need to follow the below steps.
i. All the account holders should fill out the form for the deletion of the bank account holder. While doing this, the form should contain everyone’s signature, including the account holder’s signature, who is to be deleted from the joint account.
ii. The account number and the type of account need to be written in the form. If the account holder is a minor, make sure that the guardian’s signature is also present.
iii. After the signatures are done, the remaining account holders can change the mode of operation of the joint account to jointly, single, or survivor
iv. All the debit and credit cards that the deleted account holder had issued from the joint account should be destroyed or returned to the bank.
v. You need to request a new checkbook containing the names of the remaining account holders in it.
One of the most vital point to remember is that you cannot delete a primary account holder from the joint account.
Closing A Joint Account
Though the opening of a joint bank account is simple, closing a joint account is not that simple, as it solely depends upon the bank. Before closing the joint bank account, make sure that all the bills are clear. It will prevent any future problems.
Moreover, while closing the joint bank account, all the account holders need to be present in the bank, as the bank needs confirmation from all the account holders.
Business Joint Account
A business joint account is similar to a normal joint account, except you will share this account with your business partner. Opening a business bank account is a big step, and one needs to be sure about this decision.
By having a business joint bank account, both of you will have equal rights and ownership over the bank account. Moreover, it would help you know if any mistakes happen in the transferring or any such matters.
Furthermore, a business joint account will help you track all your transactions and even categorize all the expenses in one account rather than scrambling through various accounts. A business joint account will give you a better knowledge of the cash input and cash output, unlike your personal bank account, where all the amounts are mixed up.
The joint business account will further help you apply for credit or debit cards easily, as they will be issued under the name of a business, which will make the process faster.
The steps to open a business joint account is similar to that of a normal joint account, and both the individuals will have to sign the papers.
Pros & Cons Of Joint Accounts
Everything has its own set of advantages and disadvantages. Similarly, joint accounts also have their advantages and disadvantages.
Alternatives For Joint Accounts
If you are looking for a type of account with similar features as that of joint accounts, below are some alternatives that you may find useful.
i. Linked Accounts
These are the types of accounts where the accounts of individuals remain connected in the same bank. It means that you can own an individual account and link it with your spouse or kids without creating any joint account.
ii. Convenience Accounts
These accounts are the ones where the individual can own the account, but he/she can give another individual the right to pay the bills or sign the cheques. It means your kid can have an individual account, but you can sign the cheques and pay your kid’s account bills.
1. What is the best type of joint account for married couples?
2. How can I withdraw money from my joint account?
3. Are joint accounts safe?
4. Are joint accounts safe?
5. How can I open a joint account?
6. Can I remove an account holder from the joint account?
Joint accounts are one of the most convenient types of accounts due to its features. Mostly, married couples and parents sign up for this type of account to manage their expenses and create savings for their future. As joint accounts are more secure and convenient to use, people use this type of account. Moreover, with the help of a joint account, you get to see your kid’s expenses or cash flow from your business account more precisely. If you think about a joint account, make sure that you open it with a person you trust, like your family members.