If you've recently gotten married or are otherwise sharing finances with someone such as a family member, you may want to set up a joint bank account. You can generally do this by creating a new joint account or converting an existing solely held account to a joint account. Remember that anyone you hold a joint account with can withdraw some or all of the money from the account without your permission, so you should only do this with someone you trust.
Converting a Single Account to Joint Account in SBI
Every bank has a different procedure for changing a bank account from singly held to joint, so the procedure to convert a single account to a joint account in SBI online banking may be different from doing so with Bank of America which may also have a different procedure than your local credit union.
Check with your bank to see what options are available to you to convert your account. In some cases, you can add a joint owner simply using your existing online banking interface or by mailing in a paper form. In other cases, you may need to visit a bank branch to make the change. It may be easier to open a new account with the ownership you want rather than updating an existing account.
At the same time, you may want to update other information about your account, such as your contact information, especially if you've recently gotten married and moved in with your spouse. Again, exactly how to do this varies from bank to bank. Bank of America change of address operations can be performed online, for example.
Because of security requirements, banks generally will need to verify the identity of all of an account's owners. This may mean visiting a bank branch with physical identification such as a driver's license and Social Security card or submitting copies of those kinds of documents for verification online.
Risks and Considerations
Once you open a joint bank account with someone, you generally have equal rights to that account, meaning that if you put money into the account, the other owner can remove it without your permission. You will also have to trust that he keeps the account credentials secure. While you normally might not share your credit union or Bank of America account number with even a spouse or close relative, that person will automatically have access to that sensitive information if you have a joint account.
In many cases, if one joint account owner passes away, the other can automatically hold on to the money, including money placed in the account by the deceased person, which can even override terms in a legal will.
Keep in mind that joint bank accounts can also lead to tax issues. If one person adds money to a joint bank account that another person uses, that can be considered a gift by the Internal Revenue Service, with gift tax then potentially owed.
Gift Taxes for 2018
As of 2018, gifts in a particular year to a particular person of up to $15,000 are exempt from gift tax. Over a person's lifetime and upon death, an individual can transfer up to $5.6 million without being liable for gift tax, and a married couple can gift up to $11.2 million without owing tax.
Gift Taxes for 2017
The gift tax limits for the tax year 2017 are slightly less generous than those for subsequent years. Specifically, the annual exemption applies to gifts to a particular person of $14,000 or less and the lifetime gift tax exemption is set at $5.49 million for individuals and $10.98 million for married couples.
- Alliant Credit Union: How Do I Add a Joint Owner to My Account?
- State Bank of India: Savings Bank Account
- Bank of America: Account Information and Access
- BankRate: Risks of Joint Bank Accounts
- Forbes: IRS Announces 2018 Estate And Gift Tax Limits: $11.2 Million
- Forbes: IRS Announces 2017 Estate And Gift Tax Limits: The $11 Million Tax Break
- Many couples find that the traditional approach of using one joint account is sufficient for their needs, but every situation is different. It is becoming more common for couples to have a joint account for household/family expenses, as well as individual accounts for personal use. Keep in mind that the latter will require more monthly maintenance and accounting.
- It cannot be stressed too much that sharing bank accounts requires deep commitment and complete trust. Never comingle finances casually or under duress.
Steven Melendez is an independent journalist with a background in technology and business. He has written for a variety of business publications including Fast Company, the Wall Street Journal, Innovation Leader and Ad Age. He was awarded the Knight Foundation scholarship to Northwestern University's Medill School of Journalism.