Joint bank accounts are account held in the name or by two or more persons opened for reasons of convenience or joint control of funds.
Joint accounts are mostly used by associations, cooperative societies, married couples, civil partners and any other persons for the purpose of convenience and joint control of funds.
Opening a joint bank account is not different from opening a normal savings or current account. The parties to the account will only need to present their individual KYC documents and fill their details in the account opening form.
Understanding the mode of operation and how to manage such account is very important especially mode of withdrawals and survivors. You need to talk to your bank and get a good understanding of the mode of operation and agree with your partner.
Operating Arrangement For Joint Bank Accounts.
- Jointly operated – If the arrangement is jointly operated, it will be operated by all the account holder.
- Either holder or survivors – Any of the account holders can sign and operate the account.
- Operated by former or survivors – The first name on the account will operate the account and on his demise, the survivor will operate the account.
- Operated by later or survivor – The second name on the account will operate the account and on his demise, the former will operate the account.
- Other – The account can be operated as specifically arranged with the bank. It can be operated jointly by any two account holder or jointly above a certain amount. It can also be operated by combinations of account holders with or without amount limits.
How To Restrict Joint Bank Accounts.
By the nature of joint account, any of the signatories (depending on the mode of operation) to the account have complete and unhindered access to the account including the ability to withdraw all the money in the account on demand.
So if you have any doubt about operating a joint account with anyone these are a list of way to include restrictions on the account.
- Joint Signatory – This will restrict each account holder from having independent access to funds in the account unlike a joint account with the mandate of “either to sign”. A joint signatory account requires two or more people to sign to effect transfer, withdraw cash, make changes of whatever nature to the account or even close the account. It should be noted however that a joint signatory will not be effective for ATM withdrawals and/or online transfers if the signatories to the account has agreed to use the service and has handed over security pins and passwords to one of the signatories.
- Convenience Account – An account operated as a survivor account with joint or survivor operated mode but does not give the survivor ownership of funds in the account. It often comes with the proviso that the survivors will cease to operate the account on the written authority to the bank by the original account holder or on his demise.
- No right to survivorship – an account opens as a tenancy-in-common-account. In such an account each survivor only have claim to part of the account on the demise of the original owner as specified by him.
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