Joint Account Relationships And How To Operate Them

Looking to open a joint account? Here’s everything you need to know about the different types of joint accounts banks offer customers.

Banks have several deposit schemes with customisation available for people with varying needs. Individuals can open Deposit accounts in his or her own name (single account) or jointly with one or more individuals (joint account).

Banks offer different types of joint account relationships. Here are a few.

• Either or Survivor

This is the most common type of joint account and is applicable between any two individuals.

For example, if a husband and wife have a joint account with ‘either or survivor’ clause, either of them can operate the account. In the case of the death of one of the depositors, the other can continue, and receives the final balance in the account along with all interests (as applicable at the time of closure).

If there is a nominee for the account, the conditions will be the same and the nominee gets access to the funds on the death of both the account holders.

• Anyone or Survivor

This type of account holds true when more than two individuals start an account jointly. Here, any of the depositors can operate the account at any time.

In case any of the depositors expire, the others can continue the account. If required, the final balance along with interest will be paid to any of the survivor/s as requested.

Additional Reading: The Difference Between A Current Account And Savings Account

• Former or Survivor

In this type of joint account, only the first account holder can operate the account. The second depositor gets the right only on the death of the first account holder after undergoing some basic formalities like submission of proof of death etc.

• Latter or Survivor

This is similar to the former or survivor relationship. The difference is that, in this type of account, only the second account holder (latter) can operate the account. The survivor or the former account holder gets access to the fund only on the death of the latter and on producing proof for the same.

Additional Reading: Are Joint Accounts A Good Idea?

• Minor’s Account

A savings bank account can also be opened in the name of a minor jointly with a guardian. Here, only the guardian is supposed to operate the account on behalf of the minor.

The guardian should be a parent, or in special cases, a legal guardian, as appointed by the court. Some banks allow minors above the age of 12 to open and operate accounts independently.

Additional Reading: Everything You Need To Know About Minor Savings Accounts

Things to remember:

• Any mandate/power of attorney for operating a joint account, or authorising another person on behalf of the depositors, is to be given by all account holders or with the consent of all account holders.
• All operational instructions and information in connection with the relationships formed are to be given by all the joint account holders irrespective of the mode of operation.
• If there is a nominee to a joint account, the nominee gets access to the account only when all the account holders cease to exist. In case both the account holder and the nominee are no more, the legal heirs of the depositor/s will get the funds.
• Individuals jointly running a business can open only a current account for business transactions. In case of current accounts, only the person authorised by the company/management will have the authority to operate the account.
• In case of a joint account, all the depositors are singly and jointly liable for overdraft if any. This holds true even if the application/demand promissory note does not contain one of their signatures.
• Financial transactions through net banking will be available if the mode of operation is indicated as ‘either or survivor’ or ‘anyone or survivor’. The user of net banking, in that case, should either be the sole signatory or authorised to act independently. User-ID and password for net banking will be issued to all account holders on request.
• All partners who hold a joint account are liable for all the dealings in an account as a single or joint entity. So, one should open a joint account with someone you can trust.

Additional Reading: Your Guide To Joint Life Insurance

Individual accounts may meet court restrictions and delays on the death of the account holder in the absence of a nominee. However, this is not the case with a joint account. The survivor of the account receives the balance without any legal restrictions.

Now that you know all about joint accounts, take a gander at some great Fixed Deposit schemes. It will help you grow your money over time.