A joint account is a type of brokerage account shared between two or more people who include relatives, business partners, and couples. The account is usually opened between individuals who are familiar and trust each other.
Each individual co-signed to the joint account has the right to own and manage it. Co-signors of a joint account can deposit, withdraw and even transfer money to another party.
In trading, parties who trust and are familiar with each other can open a joint trading account. Thanks to the joint account, parties will lower the obvious costs such as trading commissions and service fees.
How to Open a Joint Account
The first thing you need to do is to select the right broker. The reason for doing so is to ensure that you don’t end up being scammed. Selecting the right brokerage firm is quite simple.
The first thing you need to do is research for the best companies online. Bookmark the names for further research. You can read online reviews to determine the reputation of the brokerage firm.
Brokerage firms provide several accounts for example individual and joint accounts. The joint account allows multiple owners to open and manage it.
To open the account, parties will be required to provide their full names, or the name of their organization. Other details required include Social security, tax identification numbers, date of birth or company incorporation dates and email addresses among others.
You will have to provide the source of your income too. For example your bank, bank account number and routing numbers as this help when it comes to the electronic transfer of funds.
You may also decide to set the wire date and wire transfer thus allowing the brokerage company to invest your funds in the selected financial instruments.
The steps for opening a joint bank account are quite similar as all you have to do is make yourself available at the bank, fill out the right forms with the correct details, sign the forms and let the bank verify and complete the application.
Benefits of a Joint Account
If you open a joint account, you need to know that the FDIC and NCUA have federally insured your account to the tune of $250,000 per depositor and per institution.
This insurance helps to ensure that depositors’ funds are protected in case of bank failure. In this case, a joint account owned by two people will enjoy up to $500,000 of deposit insurance.
If you are a married couple, a joint account helps to simplify finances. For starters, when it comes to the purchase of items, investment of securities or the settling of monthly bills, the couple must create a budget.
From here, they can authorize the payment of bills and expenses thus simplifying their expenditure.
Joint account co-signors have equal ownership of the account. This means that they have the same rights when it comes to deposits, withdrawal and the management of the account.
A joint account is a convenient way of managing a couple’s finances. When it comes to expenses, couples are able to create a budget that they both agree with. From here, they can settle the expenses thus ensuring peace of mind.
In case the couple were to separate, they can contact the bank or brokerage company to close the account. If one of the joint bank account owners passes away, the balance and management of the account will pass on to the remaining account holder.