Risks involved with Joint Bank Accounts | Fusion - WeRIndia

It is quite common to open joint accounts by married couples, close relatives and business partners.

Joint banks can be operated by all parties involved with the account. So, many couples prefer to open this kind of account.

Also, in businesses like partnerships, partners prefer to open these for easy maintenance and operation.

However, there are certain risks involved with this type of account. So, take care of them if you have any joint bank accounts.

One of the most common risks involved with joint bank account is the possibility of conflicts between the partners or couples. Since, anyone can operate the account, one may withdraw or transfer funds without the consent of the other partner. This may lead to conflicts. Operation of joint account is a problematic one in the event of divorce or business conflicts.

Tax implication is another major problem involved with joint bank accounts. Normally, banks deduct TDS if the interest income on fixed deposits is more than ₹10,000. For joint bank accounts, the TDS will be deducted in the name of the primary account holder even though his / her income is taxable (he or she can get that amount refunded from the income tax department). Hence, maintaining fixed deposits in joint banks is not a good option.

The credit history of one partner can affect the other account holder as well. So, if anyone of the joint bank account holders has a poor credit history, then there is a risk of other account holders getting a poor score.

Joint bank account lacks financial privacy. All the account holders can have the knowledge of money transactions like deposits, withdrawals etc. So, if you want to maintain financial privacy, then joint bank account is not a good option.

Image by mohamed Hassan from Pixabay (Free for commercial use)

Image Reference: https://pixabay.com/vectors/risk-risk-management-risk-assessment-3576044/