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Beware while including co-owner in your bank account

Beware while including co-owner in your bank account
The decision of including a co-owner name in your bank account who is a major may sound good, but think well before taking such decisions. The decision to link any person to your banking account, be it your adult child or relative, should be taken only after looking into all the pros and cons.

It should never be on instincts. The rule of the game is to check the future merits before taking decisions related to finance because the impact can be long lasting. The general approach in India is that there is no harm in putting the name of the beloved child or a friend in the banking account.

What most people forget is that it doesn't just mean adding a name. What it also means, is giving a full authority to the adult child in your day to day financial life. The accounts can be either in the name of an adult child or in the name of a guardian typically with ownership rights.

Ownership rights:

Ownership rights mean that the account holder along with the person whose name is added will share the authority for dealing through the banking account. In a parent and child case (considering your child is above 18 years of age and is a major), the child will have full authority to sign checks, pay bills and act as an account holder.

Risks involved:

Property related disputes

The most important risk among all is the property related disputes after the death of the first account holder or even before the death by the other surviving heirs. The decisions to add the name of your major child or relative should be made on the basis of what funds you want to allocate to your legal heirs after you are no more.

Debt record of co-owner


The debt record of the person you are including as a joint account holder should also be researched before joining him as a holder of your finances. It has been noted that creditors can attach the accounts in order to recover their debts. The malaise intentions should also be looked into before extending your finances through a joint account.

Another big worry factor is when the co-owner of your account dies before you and leaves behind a heavy debt, the calls from creditors will pinch and trouble you even if he had not contributed a penny to your account. Therefore, it is necessary that a legal ownership and instinctive difference should be kept in mind. You should move forward only if you are clear with these things.

Creation of Will:

It is advised that you create a will and allocate your property to the concerned persons through it. This will ensure that things will be settled in your absence. If you don't want to make the person survivor of your account after you are no more, banks provide the option of ‘either or survivor'. After your demise, the account can be distributed accordingly along with the property.


If the account holder you want to bring in is your relative, matters become less complex. In such cases, a proper and adequate check of the situation can make you financially aware. You may also benefit from the fact that co-ownership brings with it an increase in wealth as well when the co - owner's approach is progressive and not mischievous.

Risk is a part and parcel of financial transactions and it is uncalled that you should back out from taking decisions such as involving a co-owner in your account. However, you should see to it that you have adequately examined the situations that can arise due to such decisions.

Read more about: bank
Story first published: Saturday, April 6, 2013, 11:47 [IST]
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