5 Risks That Joint Accounts Have In India

By Subham Mohanty
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    Joint bank accounts are normally opened by married couples, close relatives, business partners, domestic partners, or several individuals who may feel the to share the responsibilities of money management.

    In this kind of an account, all parties in the account exercise authority and power over the transactions in the account as agreed upon during account opening. Having a joint account requires the presence of trust between or among the account holders. Here  below we are going to discuss some risks that joint accounts face now a days: 


    1) Problematic during divorce

    A joint account can be troublesome during a divorce. The money can be hard to divide between two people.There is loss of privacy, as there are a number of people who can be ill at ease when it comes to sharing details about spending habits and income.

    2) Conflicts

    Sharing a bank account may breed conflict. Whether it’s the roommate, spouse, or business partner, disagreements can arise and having a shared account may create future issues.

    5 Risks That Joint Accounts Have In India
    As all account holders can equally access the account, they can withdraw, deposit, change details, or transfer funds any time without the consent or knowledge of the partner.

    3) Tax implications 

    When it comes to taxation, the interest income has to be declared as that of the first holder. If both people are salaried, the tax is to be applicable to the first account holder.

    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.

    4) Lack of financial privacy

    Of course, the security of your joint finances depends largely on the security of your relationship. If you open a joint account, you're committing to sharing your financial information with your partner, and giving them access to your money.

    You and your partner will each know how much the other earns, how much money you spend and on what, along with all your other financial habits. This needn't bother you, but you may prefer to have some degree of financial privacy - in which case you may want to keep your finances separate, or have your own individual bank accounts as well as your joint bank account.


    If the relationship doesn't work out and you split up, and it becomes clear that your other half has been keeping secrets from you when it comes to money, your own finances could end up in trouble too.

    If you decide to go your separate ways, and the joint account is still held in both your names, you'll have to come to an agreement about what to do with it and you may well decide to shut the account altogether.

    If the relationship ends, you may well decide to close the joint account. If this is the case, you should both contact your bank and arrange for the account to be closed, and any Direct Debits or standing orders to be cancelled or rearranged as you wish.

    If the worst happens to you or your partner, the account balance will automatically pass to the remaining joint account holder, who will then be solely responsible for managing the account.

    5) Impacts credit history

    Everything comes at a price. If an account holder has a poor credit history, it can negatively impact the partner as well. While having a joint account is generally a good idea, be careful of what may happen if a partner withdraws money from the account without informing the other. That is the reason because of which a joint account is not a viable option fot married couples.

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