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Joint account

A joint account is any bank account with more than one official owner.

Expanded Definition

A joint account has two or more legal owners, typically both members of a couple, a parent and child, or co-owners of a business. Joint ownership entitles each person to autonomous decisions over the account and its contents, including deposits, withdrawals, distributions, and access.

Joint accounts are popular for their convenience, since they make it easier to pay common bills and manage household finances.

However, joint accounts also expose each owner to financial and legal risk through the actions of the other owner(s). For example, if one person defaults on a debt, monies in the joint account may be considered a means to discharge that debt, regardless of who accumulated them or their intended purpose. A joint account can also be problematic if co-owners have different assumptions about spending and saving.

For these reasons, financial advisors often suggest that joint accounts be paired with individual accounts and used only for common bills. In this case, each member of the household or business would deposit an agreed-upon sum into the joint account at regular intervals, and this money would be used for common bills such as rent/mortgage, groceries, and utilities. Personal spending and savings, however, would remain with each individual.

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