Pros and cons of having a joint account in banks. It is not clear whether it is between husband and wife, between brothers or between two business partners. I am writing about the pros and cons of having a joint account between husband and wife. Generally, if a husband and wife have a joint bank account, the main thing to note is who manages the account. It can be seen in two ways.
When it comes to having a joint account in banks, there are several types.
Joint – Both can run together. Consent of both is required
Former or survivor – Only former can execute. If the first one dies then the second one can run.
Latter or survivor – Only latter can execute. If the second one dies then the first one can run.
Either or survivor – Any of the two can play at will. If one dies the other can easily run.
Let’s take a look at the pros and cons of the 4th type of joint account usually run by either of the two.
Let’s see about its advantages..
Financial freedom for both. No need to wait for one for the other. Able to manage funds independently.
Transparency on financial transactions; Reduced transparency of financial transactions makes it easy to see what is happening and where money is being spent.
Unfortunately, having someone else handle the money easily can help the family cope with the financial situation in the event of a sudden death.
division of labor; Dividing up financial tasks is easy.
Confidence in one increases for both; When both are free to handle the joint account independently, trust in each other increases.
A bird’s eye view of the family’s financial situation; Both husband and wife can easily know the financial status of the family as both of them always know the funds in the accounts. Assists in financial planning
If both are earners, more money is pooled and the bank benefits available through a joint account are easily availed. For example, some banks have minimum cash requirements. Failure to do so will incur a fee.
Responsibility falls on both financially related parties. They say in English, With great power, comes great responsibility. That is, with greater power comes greater responsibility. With a joint account, when both share financial responsibility, more responsibility comes..
Let’s see about its disadvantages
Financial secrets are not available; When both of them keep separate accounts, when both of them want to spend money on something secretly, they can do it. With a joint account, such secrets cannot be protected.
If one is extravagant, there will be financial problems; If one of the two is an extravagant spender, there is a possibility of financial shortage problem
If one is intemperate, there will be trouble in finances; If one is suddenly impulsive and decision-maker, there is a possibility of financial problems
If one has any credit problem, the account is likely to be frozen.
If one has any asset problem, the account is likely to be frozen
If one travels on the wrong path, there will be trouble in the family’s finances.
To me, having a joint account is healthy for couples. Both can share the financial responsibility of the family.
A separate account can be used to protect the family’s finances only in the inevitable cases where one of the spouses spends extravagantly or goes down the wrong path. But, this should be only in exceptional cases. Thanks for reading please comment box your comments..
