Planning to start a joint bank account? Here’s all you need to know

4 min read | Updated on August 12, 2025, 12:05 IST

SUMMARY

Joint account holders are equally liable for any debts or obligations associated with the account, regardless of who made the transaction. Each holder is responsible for all deposits and withdrawals, meaning they share full accountability for every transaction.

joint bank account, benefits of joint bank account

All owners of a joint checking account can write cheques and make online payments using the account.

A joint account is a bank account shared between two or more individuals. These accounts are often shared between family members or business partners.

A joint account functions like a standard account, allowing each owner to withdraw, deposit and make normal transactions from it. All account owners hold equal ownership and access to the funds present in that joint account.

How do joint accounts work?

Joint accounts can be established permanently, like for couples where their salaries are deposited. The account can also be temporary, between two parties who are contributing funds in the short term.

All owners of a joint checking account can write cheques and make online payments using the account.

Access: The account can be accessed via debit card, cheques, and online banking by all account holders without asking the co-owner to make the transaction. All owners have the same level of freehold on the account.
Responsibility: For all transactions, each holder is equally accountable, whether it is a withdrawal or a deposit. This means that the account holders have a shared responsibility.
Legal action: Joint account holders are equally liable for debts or other obligations associated with the account, regardless of who made the transaction.

Benefits of a Joint Account

Easy management: A joint account makes finances simpler, as two or more people can collectively save towards a common goal, make payments and divide expenses.

Avoiding probate: A joint account helps individuals avoid probate and legal hassles. In case an individual dies, their assets, including savings, are distributed as per their legal will. For a joint account, a surviving co-owner automatically becomes the sole owner of the account.

Credit score: Co-owners can improve their credit score by regularly using the account, whether it is deposits or repayments towards a loan from credit cards. Having a better credit score can help you avail of loan facilities at lower interest rates.

Financial planning: A joint account allows you to track payments made by every co-owner. It also helps in collaborative decision-making, as each holder can make decisions on savings, investments and purchases.

Types of joint accounts

Joint checking account: Used for everyday expenses and bill payments.
Joint savings account: Used for saving money and earning interest.
Joint investment account: Used for buying and selling investments like stocks, bonds, and mutual funds.
Business joint account: Used by business partners to manage finances jointly.

Opening a joint bank account

Starting a joint account is similar to opening a single account. You can open a bank account along with the co-owners either by visiting the bank's website or by visiting the nearby bank branch.

Choosing the type of account: You have the option to open different types of savings accounts jointly with your spouse or other family members.

Joint Account eligibility: Ensure that every co-owner meets the eligibility criteria before opening a Joint Account. Different types of joint accounts have different types of requirements.

Agreement: Read the entire agreement before signing it and review the fee structure and other terms and conditions. Make sure you understand the fine print to avoid any surprises later.

Tax implications

All holders of the joint account are equally responsible for paying taxes on any income earned from the account. Each person's share of the income is reported on their own tax return. It is important to understand compliance with tax laws and regulations specific to your account to ensure compliance.

Many leading banks in India offer joint accounts:

HDFC Bank: HDFC offers a savings account interest rate of 2.5% per annum on all balances on joint savings accounts. It also offers benefits like cashback, insurance cover and platinum debit cards on specific account variants like SavingsMax or Specialé Activ.

ICICI Bank: ICICI Bank offers a savings account interest rate of 2.5% per annum on all balances. It offers family savings accounts allowing spouses, children and parents to link accounts and access them with a shared Family ID.

Yes Bank: Yes Bank offers an interest rate between 3%-5% per annum, depending on the balance slab. It also offers “Either or Survivor” and “Jointly Operated” accounts.

Joint accounts offer a convenient way to manage money when two individuals have frequent monetary transactions that involve both of them, and they can help you manage your finances better. Before opening a joint account with anyone, make sure you understand all the implications and are ready to take shared responsibility for all the transactions made through the account.