Like all other bank accounts, the joint account or collective account has advantages and disadvantages that it is important to know before opening it. Mastering the operating principle of such an account makes it possible to measure the risks it generates and to better prevent possible disappointments.
How does a joint bank account work?
The operation of the joint bank account depends on the validation of the signatures of the holders. If the name of the account is “Mr. If, on the contrary, the account is in the name of “Mr. X and Mrs. Y,” the agreement of both signatories is necessary to carry out an operation.
Advantages and disadvantages of this account
Advantages and disadvantages of this account For a couple, friends or roommates, combining resources in an account allows them to cover common expenses. This simplifies income management and makes it possible to consider joint projects using the funds collected.
However, the holders of the joint account are responsible for the transactions carried out on it, whether their signature is joint or separate. If the account has a debit balance, the bank will require the holders to fund it, without trying to determine who contracted this debt. Likewise, holders may be banned from banking in the event of non-payment.
Why is this account interesting?
Due to the pooling of risks, the collective account requires real trust between the holders, particularly in the case of separate signatures. Otherwise, it is better to open a joint account with joint signatures. You can therefore refuse to endorse transactions that could put the account at risk.
