Joint Account
What it is:
A joint account is any type of bank account held by two or more persons.
How it works/Example:
All members of a joint bank account are responsible for any liabilities in connection with the account. Actions taken on the account may require the written consent of all parties, depending on the terms of the agreement signed at the time the account was opened.
Many joint accounts are owned by married couples, in which case both generally agree that action on the account may be taken by the signature of either party. In the event of death, account ownership automatically passes to the surviving party.
Why it matters:
A joint account is an excellent option for two or more individuals sharing common financial interests or goals. It is advisable for an individual participating in a joint account to ensure the trustworthiness of all members in the joint account, since individuals are liable for the actions of the other parties, as well as their own.