Joint account is a type of account which can be opened by two or more individuals together and operate the same. There are 4 different types of joint account and it can be opened with spouse, parents, siblings or children.
The operations in joint account will depend on the operating options such as either or survivor, anyone or survivor, former or survivor and latter or survivor.
However, banks restrict maximum number of joint account holders to four.
Here are few things to consider before opening a joint account
1) To open a joint account, one should trust the other person completely. The main benefit of having joint account with family member is easy convenience of bank transactions.
2) If you are out of town or if there is an emergency when you are not around, your the other holder can operate the account and get the work done such as cash withdrawal of deposit without any hassle.
3) There will be benefit if both account holders have income and contribute equal amount to their savings account. For examle, if a married working couple is having salary account one individual can contribute to joint account as the savings for future.
4) In case of sudden demise of one account holder, the other will have financial access to other account holder without much documentation. The other account holder is eligible for all the access even if there is no WILL.
5) When it comes to taxation, the interest income will has to be decalred as that of the first holder.
6) Incase of joint account, if both the members are salaried, the tax is applicable to the first account holder.
7) If you are first account holder and second account holder is your spouse whose income is NIL, though you are eligible for tax.
In such cases, first account holder should be the one whose income is NIL or below the tax slabs.