Joint Account Rules and Regulations in India | DBS Bank (2024)

FAQs

What are the rules for joint bank accounts? ›

Following are the Joint Bank Account Rules in India per the account mode. Joint: All transactions in the account must be approved and signed by all the account holders. If any one of the account holders dies, the account will be deemed inoperable, and the bank will pass on the balance in the account to the survivor.

As a Non-Resident Indian (NRI), holding a joint account with a resident Indian can be a convenient way to secure the financial well-being of your family in India.

If the joint account earns interest, you may be held liable for the income produced on the account in proportion to your ownership share. Also any withdrawals exceeding $14,000 per year by a joint account holder (other than your spouse) may be treated as a gift by the IRS. This may subject you to gift tax.

The money in joint accounts belongs to both owners. Either person can withdraw or spend the money at will — even if they weren't the one to deposit the funds. The bank makes no distinction between money deposited by one person or the other, making a joint account useful for handling shared expenses.

Joint bank accounts

If one dies, all the money will go to the surviving partner without the need for probate or letters of administration. The bank may need the see the death certificate in order to transfer the money to the other joint owner.

If the funds in your joint bank account are considered separate property and owned exclusively by your spouse, they may legally be able to drain the account. Similarly, even if the account is community property, a spouse may be able to withdraw money for reasonable living expenses, legal fees, and children's expenses.

A joint account can be held by an NRI with his/her resident close relative which can include parents, siblings, spouse, siblings' spouse, children, grandparents, and spouses of grandchildren. For such accounts, the resident Indian remains the primary holder and the NRI is considered the secondary account holder.

A joint account might damage your credit score

Opening a joint account adds a financial link to the other person. This means companies will look at both of your credit histories as part of any credit checks. If they have a poor credit history, this might lower your chances of acceptance.

What is bad about joint account? ›

Lack of control. You cannot control how the other party spends your money. If your partner decides to spend frivolously, you will both feel the blow. This sort of problem can lead to many fights about what is necessary to spend on and what isn't.

In the United States, there are typically two types of joint accounts: survivorship accounts and convenience accounts.

Primary account holders are legally responsible for the account. Primary account holders can name others as "authorized users" on the account, but they remain responsible for it. Joint account holders share responsibility for that account and both are considered primary account holders.

Joint Bank Account Rules on Death

"The joint owner becomes the legal and equitable owner of all funds in a joint account at the instant of death," says Doehring. "It does not become part of the probate estate."

Accounts can be opened in person at a branch office or online, depending on the bank you choose. If you plan to do it in person, both account holders will need to be present.

Can one party with a joint bank account close the account? Generally, no. Banks require that both account holders consent to closing the account. It may be possible in some cases for one account holder to remove themselves from the account, though, without the explicit consent of both parties.