Is a joint account a good banking option for you? Find out in this article.
Banks offer various types of savings account that allow you to park your money safely and access it as needed. These accounts also come with a bouquet of facilities that enable you to conduct your everyday banking transactions in a safe and seamless manner. One such type of savings account is a joint account. Let us find out more about joint accounts in this article.
A joint account is a type of savings account which you can open jointly with one or more individuals. It is usually created by families, business partners or spouses who share a degree of familiarity. Joint account holders typically get equal access to funds parked in the accounts. Most banks allow two or more individuals to open a joint account together, enabling them to pool their funds in one single account for safekeeping. A few banks allow up to four joint holders in such joint accounts, but every bank offering savings accounts will also offer joint accounts in India.
Joint accounts operate in more or less the same way as any regular savings accounts. The chief distinction is that more than one user can operate a joint account. The sums deposited in a joint bank account belong equally to all owners, who can deposit and withdraw money as needed. You may conduct your banking transactions on an 'either/or' basis. This simply means that the signatories for transactions can be either one of the joint account holders, or all of them, based on the selection made by all parties at the time of account opening. You must open a joint account only with someone you know and trust, as it involves giving someone complete control over all the funds parked in this type of bank account.
You get all the primary benefits with a joint account, such as debit cards for all account holders and cheque books with names of all account holders embossed on cheque leaves. You also get access to other facilities like internet banking, access to loans, mortgages, and lines of credit (for joint business accounts), among other things.
The procedure to open joint accounts is very similar to that of opening a regular account. All parties being named as joint account holders need to be present while opening the accounts. You may open the account online or at the bank.
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Joint accounts offer a lot of benefits to their holders. The following are some of the significant benefits of this type of account.
Joint accounts may also have a few limitations that account holders need to keep in mind before creating one. They include the following:
One of the biggest perks of opening a joint account is the ease of having and accessing money through a single account seamlessly. You and your joint account holder can pool all your finances in one account to pay off your mortgages, taxes, EMIs or other joint debt payments. This is both convenient and enables you to manage and record all transactions seamlessly.
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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.