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Joint Account In Bank: Advantages And Disadvantages To Consider

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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.

 
Joint Account In Bank: Advantages And Disadvantages To Consider

However, banks restrict maximum number of joint account holders to four.

Here are few things to consider before opening a joint account

Advantages

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.

Disadvantages:

1.In addition to the many benefits of a joint bank account, you also take certain risks. For starters, there is no protection if an owner misuses the account. So, if your partner makes a Cheque associated with the account without your knowledge, you are both held responsible even if you have nothing to do with it.

2.In addition, an owner can withdraw a huge portion of the funds without notifying another owner. Since joint bank accounts assume owners communicate regularly, the bank will not need approval for this type of transaction. That's why it's important to open a joint bank account with someone you trust. You should also check the account regularly.

3.Likewise, a person's financial problems can become the financial concerns of both owners. For example, if an owner divorces or goes bankrupt, the funds in the account will be considered as that person's assets. This means that, regardless of the other owner, the money is up for grabs. You and your co-owner will need to be honest and frank about each of your finances to avoid a big financial disaster.

Tips for finding the right bank account:

1.Choosing the right bank account is a huge financial step, not just for joint bank accounts. Finding the bank or credit union that you are most comfortable with is a good start. That way you know that your banking experience is more likely to be positive.

2.You will also want to compare bank accounts. Comparing some of the best checking and savings accounts will help you see what exists. You will not want to settle for a low-interest rate once you see that you can do better!

Goodreturns.in

Read more about: joint account banking
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