how joint accounts work
joint accounts work just like regular accounts except they can have two or more authorized users joint accounts can be established permanently such as an account for a couple into which their salaries are deposited the account may also be temporary such as an account between two parties who are contributing funds in the short term bank accounts held jointly between two parties may be titled with an and or an or between the account holders names if the account is listed as an and account then both all parties must sign to access the funds if it is an or account only one party must sign accounts jointly held include deposit accounts at banks including checking and savings accounts credit cards and other credit products such as loans lines of credit loc and mortgages the joint status authorizes all those listed on the account to full use but also the responsibility for any payments fees or charges incurred opening a joint account is as simple as opening up a single account both parties should be present at the bank when the account is open whether that s a deposit account or another product like a mortgage or loan for credit cards adding a secondary or authorized user is akin to opening a joint account in most cases this requires the signature of the second party uses and benefits of joint accountsjoint accounts can be helpful for their holders and provide several benefits many funds require minimum balances particularly if the holder wants to access the benefits of a specific account type by pooling their money two people can bypass this requirement and reap the benefits of the account opening a joint account may also be helpful to newer couples who are combining their finances couples may find it easier to have a single account into which they can deposit their paychecks and make payments for their rent or mortgage bills or other joint debts a senior may find it helpful to add one of their children or another authorized user to their accounts to pay bills and do routine banking on their behalf if and when they are not able to do so on their own pitfalls of joint accountsjoint accounts can cause problems however because they generally provide all parties unlimited access to the funds thus if one spouse has difficulty controlling their spending habits this may affect the other spouse who may be more frugal the frugal spouse cannot challenge the withdrawals or transactions of the other spouse with the bank because they are listed as a joint account holder another thing to remember with joint accounts is that all parties with access are responsible for any fees if your husband runs up your joint credit card you are equally responsible for paying it back similarly if your joint checking account goes into overdraft you are liable for a negative balance the government may seize any funds in a joint account to satisfy an outstanding order that includes back taxes that may be owed child support or other court ordered garnishments it is best for both parties to discuss the responsibilities associated with opening a joint account before doing so this can avoid any unnecessary problems and conflicts that may arise all parties should discuss the pros and cons of opening a joint account to avoid potential future conflicts joint account rightsseveral titling mechanics designate how the funds are divided if one of the parties on the account passes away these options are required on joint brokerage accounts joint tenants with rights of survivorship jtwros if one of the parties passes away the assets in the account pass by the rule of law outside of probate to the surviving parties tenants in common tic this allows each joint holder of the account to designate their beneficiary for their portion of the assets in the event they pass away instead of transferring by the rule of law to the second account holder the assets are passed to the beneficiary in addition the assets may not be automatically split 50 50 the tic designation allows the tenants to divide property ownership in any way they choose joint tenants option this option mandates a 50 50 split of the assets in the joint account 