What are the rules for joint bank accounts?

Sometimes I prefer joint bank accounts. Because they might be a useful method for splitting costs or helping manage the money. In circumstances where there are numerous people involved, joint accounts may assist you to manage and cover daily expenses. They might confuse your tax status and raise questions about your responsibilities. So let me tell you about the joint account rules and regulations.

What are the rules of a joint bank account?

There are no specific joint account rules India. You can open a joint account with any bank that provides savings accounts. There is no limit on the number of customer accounts who can jointly access one account, as per the Reserve Bank of India (RBI). There are certain institutions that limit joint account holders at 4. How you manage the joint savings account is governed by the contract you have in place with the bank. This refers to the joint account withdrawal rules.

Joint accounts function exactly like regular accounts. They may be long-term or transient (i.e. for a short period). Accounts held in a bank jointly with another person include credit cards, verifying and savings accounts. It also includes other financial derivatives like loans, borrowings, and credit lines (LOC). So now you know what are the rules for joint bank accounts.

What things to keep in mind while opening a joint account?

• Never open a joint account with somebody you don't have complete faith in. Ideally a member of the family.

• If you must open an account with a third party or close friend, be sure to discuss all the terms in advance and, if at all practical, in writing.

• The interest earned on these accounts is typically counted as the principal account holder's income. You will have to pay tax on such income if you are the main owner of the account.

You are now aware of the joint account rules and regulations.