Bank regulations on joint accounts

Written by sara melone
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Bank regulations on joint accounts
Joint bank accounts provide access to two or more named account holders. (dispute for the money image by ktsdesign from Fotolia.com)

Joint bank accounts are often utilised for convenience purposes by married or cohabitating individuals, but they are also used for older generations who receive assistance with household issues from adult children or grandchildren. Some parents also create a joint account to help adolescent or young adult children establish a credit and banking profile. Owners of a joint bank account are seen as joint owners of all funds entrusted into the account, and some banks have special regulations for joint accounts.

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Deposits and Withdrawals

Unless otherwise stipulated, any named account holder on a joint account has the authority to make deposits and withdrawals to and from the account. One account holder cannot hold the bank responsible if another named person on the account makes a deposit or withdrawal of the account funds. If you plan to open a joint account but you want to limit who has permission to make deposits or withdrawals, you must make a provision for that when you establish the account or when you add a joint account holder to the account. You may request a stipulation that two or more signatures be required at all times by both or all account holders in order to access the account funds.

Bank regulations on joint accounts
To limit fund access to any account holder, special provisions must be added to the account. (dollars image by KALISTE A from Fotolia.com)

Accountability

All joint owners of a current account are considered by the bank to be responsible for any required maintenance of the account. In the case of an overdrawn account, all owners of a joint account are equally responsible for overdraft liability and any associated overdraft fees. This policy remains in force regardless of who may have been responsible for making the associated charge to the account which resulted in an overdraft or who may have been responsible for depositing money to cover expenses. All owners of a joint account are also equally responsible for any monthly or yearly fees charged by the bank in addition to upholding all account holder policies and agreements.

Bank regulations on joint accounts
All named persons on the account are responsible for all charges and fees. (Accounting and finance image by MAXFX from Fotolia.com)

Survivorship Rights

A joint account which is shared by two individuals is most often considered to be a joint account with rights of survivorship unless an alternative account arrangement is otherwise constructed between the bank officials and account owners. When one account holder of a joint account dies, the funds in the account automatically become the sole legal property of the surviving account holder. The surviving account holder may choose to withdraw all funds or close the account at his discretion, and no claim can be made by the deceased's heirs or estate in order to recover the funds belonging to the survivor.

Bank regulations on joint accounts
In the event of one account owner's death, the account becomes sole property of the survivor. (dollars image by Maxim Kulemza from Fotolia.com)

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