Joint Checking Account Advice
Opening a joint checking account has its advantages and disadvantages. If one account holder puts funds into the account, those funds may be legally spent by the other account holder. If the account holder makes purchases without the other account holder knowing, both are liable to pay for the purchases and any fees. Those who do not trust others with their funds should think twice before opening a joint checking account.
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Joint Checking Account
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A joint checking account is a banking account held by more than one owner. The funds deposited into the account will belong to both account holders, and the bank will not keep track of whose funds are whose. Both account holders can withdraw funds, without consulting the other account holder. Both account holders are responsible for the account and liable for all purchases made.
Dividing Funds
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The funds that are deposited into a joint checking account are accessible by both parties named on the checking account. That means if 75 percent of the funds in the account belong to one individual on the account, the other account holder who has deposited the other 25 percent may legally withdraw or spend the entire amount. The funds are made available to both parties and may be drawn out at either account holder's discretion. Opening a separate account may be the best route to go if the joint account holders do not trust each other.
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Liability
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When a check is written by one account holder, both are held accountable if the account does not have sufficient funds available to cover the check amount. It is illegal to write a check knowing the funds will not be made available. If either account holder has a separate account with the same bank, bank policies may allow the bank to pay take funds from the separate account to pay the insufficient funds owed on the joint account. Both account holders will be responsible for any fees charged to the account.
Closing the Account
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If an individual opens a joint account with another individual but wants to close the account, both parties must agree. One account holder may not go into the bank and close the account, or remove her name from the account unless both parties are present. If schedules of the account holders conflict with banking hours, the bank will send necessary documentation and forms to close the account that both parties must sign together in front of a notary public and send back into the bank. The account holders will receive any funds in the account at the time of closing.
Saving Money
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Individuals who want to save up money to make a financial purchase together, such as a home, may open a joint account. This allows the account holders to deposit the amount they may have previously agreed on in installments, so that when the two are ready to make the purchase, they will have saved the necessary funds. The funds will also receive interest, depending on bank policy, which will add money to the fund and possibly speed up the process of funding the purchase.
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