People who want their money to be available for access to more than one person, joint accounts are the right choice. In general, a normal checking or savings account has only the owner name listed in the account. This means that only the owner can withdraw money from that account. But is some cases, where more than one person needs to access an account, a joint account is the obvious choice. This can prove to be of extreme benefit for married couples.
Joint accounts are not only for married couples. It can prove be of great assistance to business partners, parents who want to open an account with their children etc. In some cases, community agencies also prefer a joint account.
After opening a joint account, each and every person on the accounts’ list can access the account; making deposits, writing checks, and withdrawing money from the account. However, in some cases it’s mandatory to have two signatures on the check or withdrawal slip. It’s checked prior to releasing the funds and it ensures that no secret or illegal withdraws are made from the account.
Joint accounts are mostly popular between married couples where both parties are able to access the account at will, making bill paying procedures a whole lot easier. Besides married couples, elderly parents can open a joint account with their children, making sure that the children can avoid court mandated probation after the death of their parents.
Unlike the normal savings or checking account, joint accounts provide its owners with the right of survivorship. This means that in case of the death of an account holder, the other person is named as the owner of the money in that account. This avoids the need of court probations, which can keep the money in probate or escrow for a long time.
Due to the fact that either party can access the funds in a joint account, it’s absolutely necessary that you trust the person with whom you’re going to open a joint account and that he/she trusts you as well. You should also know that in case of a bank overdraft, you’ll be held liable as well, even if you didn’t have anything to do with it.
Another thing you should understand is that to a creditor, a joint account is no different than a personal account. They will still be able to deduct money from the joint account.
Joint accounts are of great value to married couples, especially in cases where either party has a lot of outstanding debt to their name. It can help them restore some balance to their financial state. But in all cases, for a joint account to be effective, it’s of utmost importance that both parties trust each other fully.