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Your First Joint Account

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In almost every adult’s life there comes a point when they consider opening a joint bank account. Whether they want to open the account with a parent, sibling, roommate, friend or significant other, they might decide this is a good idea for paying joint bills, saving joint funds and furthering their relationship. In lots of instances, this is true—a joint account is a good idea. But that’s not always the case. In the wrong situations and with the wrong people, a joint account can mean trouble, which is why you really need to understand what you’re getting yourself into before opening one.


Joint Account, Joint Assets


A joint account doesn’t just give two people access to the same pool of funds; it actually converts deposited funds into joint assets. It doesn’t matter if you’re the only one contributing to the account. All the assets are considered the property of both joint owners, which means one owner can completely empty the account with no consequences.


Joint Assets, Joint Responsibility


Not only do assets become shared in a joint account but mistakes become the problem of both owners as well. If your joint account holder bounces checks, has a lien placed against his or her assets, or faces judgments or garnishments, those joint assets could be at risk. Likewise, if the joint account holder becomes the victim of identity theft or has their debit card stolen, the funds in your account could be at risk.


Protecting Yourself


There are three steps I suggest you take when opening a joint account with another person.


  1. Keep an eye on the account. Don’t trust that the other person will handle account balancing and maintenance. Always review the transactions at least monthly.
  2. Only deposit joint savings and bill payments into that account. Instead of putting all your money in the joint account, keep your own separate individual account for the portion of your pay that does not go toward joint bills and joint savings.
  3. Require dual signatures. If you’re setting up a joint account for bill payment or savings, then you can skip the debit cards and just have checks that require the signatures of both account holders in order to be valid.

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