Joint bank accounts can come in handy for individuals who wish to share their finances, such as a married couple. A joint account gives you and the other account holder equal access to the account, as well as equal responsibility for its management, but there are certain requirements you must meet before the bank will open a joint account.
A joint account will require both account holders to fill out a bank application. Many banks permit you to open accounts in person and online. As part of the application process, the bank will have to verify your identity and that of the joint account holder. All applicants will have to provide driver's license information or state identification information, a Social Security number, date of birth, and current address. The bank will use this data to verify your identity and make sure you are who you say you are.
As part of the verification process, many banks will check your credit prior to opening a bank account. For joint accounts, the bank will require credit checks on all account applicants. The bank will generally check your consumer credit report to verify that the information on your application matches the data contained within your credit file. These extra verification steps help the bank protect itself against fraud. They also help prevent someone from committing identity theft by pretending to be you and then opening an account in your name.
In addition to checking your credit report, the bank may also verify applicant information with ChexSystems, which is a financial credit bureau. ChexSystems maintains a database of consumers who have mishandled a bank account. For example, if a bank previously closed your checking account due to unpaid overdrafts or bounced checks, ChexSystems may have a record of it. If anyone applying to be on a joint account is listed in ChexSystems, some banks may not open an account for you. A consumer record in ChexSystems will remain there for up to five years.
With a joint account, all signers on the account can write checks, make deposits or withdraw funds from the account. The account holders also share liability for transactions that occur on the account. If the account becomes overdrawn for any reason, the bank will hold all parties responsible for bringing the account current. If a joint account is closed for mismanagement, the bank may report all account holders to ChexSystems regardless of which account holder actually mishandled the account.
With a joint account, the account holders have to decide right of survivorship, which determines who will receive the funds in that account should one account holder pass away. Joint account holders may hold the account as joint tenants with rights of survivorship. With this type of ownership, rights to the account and the money in it automatically revert to the surviving account holder. If the joint account is held as joint tenants in common, the account holders can each leave their share of the account to someone else via a will. Survivoship rules may vary from state to state, so check with the bank or an estate attorney to see what may apply in your situation.
- Bankrate: How Do I: Open An Account Online?
- Bankrate: Ask Whether Bank Pull Credit Reports
- DailyFinance: Joint Bank Accounts: What You Need To Know
- Bankrate: ChexSystems
- Kiplinger: Inheritance Rules For Joint Checking Accounts
- Bank of America. "Our First Bank Account." Accessed April 20, 2020.
- Consumer Financial Protection Bureau. "A Closer Look: Overdraft and the Impact of Opting-In," Page 1. Accessed April 20, 2020.
- Code of Virginia. "§ 6.2-606. Ownership During Lifetime; Garnishment, Attachment, or Levy." Accessed April 20, 2020.
- Consumer Financial Protection Bureau. "Either Person on the Joint Account Generally Has the Right to Move Funds or Close the Account." Accessed April 20, 2020.
- University Credit Union. "Membership Agreement." Accessed April 20, 2020.
- BBT. "Bank Services Agreement," Page 7. Accessed April 20, 2020.
- Wells Fargo. "Opening and Closing Accounts Questions." Accessed April 20, 2020.
- GreenState Credit Union. "Closing Your Account." Accessed April 20, 2020.
- Suntrust. "Rules and Regulations for Deposit Accounts," Page 28. Accessed April 20, 2020.
- Bank of America. "Telling Your Bank It’s Over." Accessed April 20, 2020.
- Washington and Lee Law Review. "Virginia's Equitable Distribution Law: An Owner's Manual," Page 9. Accessed April 20, 2020.
Mack Mitzsheva is a tax lawyer, personal finance expert and the author of the forthcoming ebook, "10 Best Places to Work Online." Mitzsheva is also a social media entrepreneur with five successful sites under her belt. Always innovative, Mitzsheva is currently developing a cutting-edge budgeting app for newlyweds.