Joint accounts are shared by two or more individuals and offer numerous benefits. They can be opened with spouses, children, friends, or business partners.
According to the Reserve Bank of India guidelines, the number of members in a joint account is not limited, but some banks restrict it to a maximum of four.
Joint accounts can include savings, current, fixed, or recurring deposit accounts. Non-resident Indians (NRIs) can also open a joint account with citizens of the country.
Any member can operate the joint account, and after the death of one member, the remaining members can continue to use the account. However, all members must provide their signatures for any transactions made from the account.
All account holders must submit identification documents such as Aadhaar, PAN, passport, or voter ID cards. For added security, a nominee can be appointed for the joint account.
Each member shares equal responsibilities regarding the joint account. This includes accountability for overdrafts, loans, and other obligations associated with the account.
Interest income earned on the deposits in the account is attributed to the primary account holder for tax purposes.
The account may be frozen in a member dispute until the issue is resolved. Additionally, all members must consent to close the account.
Opening a joint account is straightforward. First, visit the bank to complete the joint account application. You must provide proof of identity, address, and recent passport-sized photos of all account holders.
Choose the mode of operation to specify who will have the authority to operate the account. Then, make a minimum deposit as the bank requires to activate the account.
Joint accounts facilitate collective decision-making. They often offer higher interest rates than individual accounts, making them helpful in saving money.
They also simplify the transfer of funds between members and enable joint investments and other financial activities.
When all family members’ finances are managed together, tracking and overseeing family financial health becomes more effortless.