Category: 

What Is a Joint Savings Account?

Joint savings accounts tend to be among the least volatile investments over time.
Married couples often open joint savings accounts.
Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 11 December 2014
  • Copyright Protected:
    2003-2014
    Conjecture Corporation
  • Print this Article
Free Widgets for your Site/Blog
Peruvians eat more than 60 million guinea pigs a year.  more...

December 21 ,  1933 :  Dried blood serum was first produced.  more...

Joint savings accounts are bank accounts that are established for the mutual benefit of two individuals. Married couples will often establish an account of this type in order to build financial security for the family unit. At times, a parent may establish this type of account for a minor child. Today, domestic partners and even friends may choose to open a joint account in order to save money for long term security or for a specific short-term project.

For households that want to build financial security, a joint savings account is often an excellent first step. Joint accounts tend to be one of the least volatile of any investment strategy. While the return earned from joint account interest is small, it is consistent. This means that even people who are leery of more aggressive forms of investing are likely to feel comfortable with a savings account of this type, and thus will be motivated to save money.

There are a number of benefits associated with a joint savings account. One has to do with making the process of saving easier. If both parties listed on the account are employed, they may choose to have a portion of their salary or wages direct-deposited into the account. This makes it possible to grow savings without the need for one or both parties to constantly make manual deposits at the bank.

Ad

A joint savings account can also be a means of funding a checking account in the event of an emergency. Thanks to the online access that many banks now offer, one of the individuals listed can log into the joint account and initiate a transfer to another account at the same bank instantly. This can be an important money management tool that will prevent overdrafts that could occur when an unexpected situation arises.

In many jurisdictions, having a joint savings account is a practical way to make sure finances are not disrupted when one of the account holders dies. In some areas, assets that are in the name of the deceased are immediately frozen at the time of death, pending distribution of assets according to the terms of a will. When a joint account exists, the assets contained in the account are still readily available to the other individual listed on the account. This means that a surviving spouse, partner, or child will have access to at least some funds while the estate of the deceased is settled.

When considering the possibility of opening a joint savings account with anyone, it is important to understand local laws that will apply, as well as to have a great deal of trust for the other party. Make sure you understand how a joint account transfer is conducted, the nature of any joint account death laws that may apply, and how the joint account interest is calculated. Assuming the terms are agreeable and both partners can work together successfully, the account will prove to be one of the most useful assets that the two individuals can create.

Ad

More from Wisegeek

You might also Like

Discuss this Article

GreenWeaver
Post 4

Cafe41-I think it is a good idea to have a savings bank online. It makes it so easy and you don’t have to worry about teller lines, which I absolutely hate.

I opened a joint bank account with my husband when we got married. We communicate what we each spend so there is never a problem.

He makes the savings deposits and we always balance our account. I think that a joint bank account is best for married couples that have a commitment.

Having a joint savings account with a boyfriend is not the same. There could be a lot of legal problems if you break up and one of the parties takes all of the money.

cafe41
Post 3

Sunny27-Most people do their banking online, so this should not be a problem. I know that Bankrate offers information regarding various savings account yields.

It might be a good idea to check this site out first. I believe that this account is a free savings account, meaning that there is no minimum balance in order to maintain the open savings account. These accounts are probably the best internet savings accounts.

Sunny27
Post 2

SurfNturf-I always pay my credit card bills at the end of the month, so I don’t think I will ever have that problem. I did want to say that it is fairly easy to open a savings account.

In fact there are many internet savings accounts available. ING Direct and HSBC offer competitive rates on their savings accounts, I know for HSBC, they usually offer five times the standard interest rate yield offered for most savings accounts, but they do have restrictions.

This account does not offer any form of branch service. You can not go inside the branch to place a savings deposit or seek assistance for any aspect of the account.

You can use the ATM for deposits and withdrawals but that is it. It is like a no-frills account that offers a high yield for those that open the account.

surfNturf
Post 1

A bank levy is issued when a creditor in a sense puts a lien on your bank account and has the assets frozen.

Usually the I.R.S. will do this if you owe back taxes and have not responded to their letters or arranged a payment plan.

In addition, the I.R.S. can also place a bank levy on an offshore account as well. It is important whenever you are dealing with the I.R.S that you communicate with them immediately to avoid something like this from happening.

But the I.R.S. is not the only ones that can seek this action. Depending on your state laws, many credit card companies can seek payments from these accounts and freeze the account, so that you no longer have access. They can also withdraw the amount necessary as well.

Post your comments

Post Anonymously

Login

username
password
forgot password?

Register

username
password
confirm
email