How to put re­stric­tions on joint bank ac­count

The Punch - - PERSONAL BANKING - Source: fi­

PEO­PLE find joint bank ac­counts con­ve­nient. They al­low spouses to pool money for com­mon ex­penses, while an el­derly per­son might rely on a joint ac­count to en­list the help of adult chil­dren with fi­nances. Making some­one a joint owner typ­i­cally means pro­vid­ing com­plete ac­cess to the ac­count, in­clud­ing the abil­ity to empty it on de­mand. Those who feel wary about the risk can choose to in­clude re­stric­tions when the joint ac­count is first opened.


Those who want to re­strict a joint bank ac­count can re­strict sur­vivor­ship, re­quire dual sig­na­tures, open a re­stricted ac­count or use a joint con­ve­nience ac­count.

No right of sur­vivor­ship

In most cases, ev­ery joint ac­count holder equally owns the money. This means that the death of one ac­count holder leaves the survivor with all of the ac­count’s funds. Such ac­counts are called joint ten­ants with rights of sur­vivor­ship – JTWROS for short.

The prospec­tive ac­count hold­ers can also open it as a ten­ancy-in­com­mon ac­count to re­strict sur­vivor­ship on a joint ac­count. Each per­son would only own part of the ac­count, ei­ther equal or un­equal shares, de­pend­ing on what the own­ers spec­ify up front. In the event of death, an owner’s share is left to who­ever is named in his will.

Re­quire­ment of dual sig­na­tures

To re­strict each ac­count holder’s abil­ity to in­de­pen­dently with­draw funds or to close the ac­count, the own­ers can open a joint ac­count that re­quires two or more sig­na­tures for with­drawals, de­pend­ing on the num­ber of ac­count hold­ers. The pa­per­work would link the names in the ac­count with the word “and” rather than “or.” Printed cheques might say, “Jane and John Jones.” This re­quire­ment won’t pre­vent a de­ter­mined ac­count holder from raid­ing the ac­count by way of an Au­to­mated Teller Ma­chine card, how­ever, or even a cheque be­cause banks process most cheques au­to­mat­i­cally, with­out a sig­na­ture cheque.

Ten­ancy by the en­tirety

Some banks of­fer a re­stricted ac­count known as ten­ancy by the en­tirety. Only mar­ried spouses can cre­ate such a bank ac­count. Although the par­tic­u­lars of th­ese ac­counts can vary, a cred­i­tor of only one owner-spouse can­not gen­er­ally go af­ter funds in the ac­count. The ac­count fea­tures the right of sur­vivor­ship and may re­quire two sig­na­tures for with­drawals.

Joint con­ve­nience ac­count

An owner can open a joint con­ve­nience ac­count or add some­one to an ex­ist­ing ac­count as an au­tho­rised sig­na­tory if he wants to grant some­one the abil­ity to con­duct trans­ac­tions on the ac­count but not give him own­er­ship of the funds. This is called a power of at­tor­ney, and it gives the ap­pointed per­son the right to man­age your af­fairs.

A power of at­tor­ney is of­ten used when an el­derly in­di­vid­ual needs as­sis­tance pay­ing bills or when a cou­ple will be out of town and they re­quire help man­ag­ing their af­fairs while they are away.

The sig­na­tory might also be re­ferred to as an agent.

The sig­na­tory’s ac­count ac­cess ends when the ac­count owner re­vokes per­mis­sions or dies. There is no right of sur­vivor­ship be­cause the au­tho­rised sig­na­tory was not an owner of the ac­count, nor can the sig­na­tory’s cred­i­tors go af­ter the funds. A con­ve­nience ac­count may also be used where a sig­na­tory al­ready has power of at­tor­ney over the ac­count holder.

Co-signer ver­sus co-owner of bank ac­counts

Hav­ing a bank ac­count can make pur­chases and bill-pay­ing more con­ve­nient. It may also per­mit you to re­ceive di­rect de­posit from your job. You can open a bank ac­count in your name alone or with an­other per­son. Whether that per­son signs up as a co-signer or cobor­rower will de­ter­mine his obli­ga­tions on that ac­count.


A co-signer is some­one who agrees to be fi­nan­cially li­able for a debt if the bor­rower does not pay it. For bank ac­counts, this debt may in­clude over­drafts, bounced cheques, un­paid main­te­nance fees and other fees that oc­cur on the ac­count. If the ac­count holder racks up fees on the ac­count and does not, or can­not, pay them, the bank will ex­pect the co-signer to cover the debt. A co-signer does not have to be a rel­a­tive, but must be some­one who agrees to take on that de­gree of re­spon­si­bil­ity.


A co-owner is a joint ac­count holder. All sign­ers on a joint ac­count have equal li­a­bil­ity for the ac­count. This li­a­bil­ity is present the mo­ment the ac­count hold­ers sign for the ac­count. If the be­hav­iour of one of the ac­count hold­ers leads to an as­sess­ment of fees on the ac­count, both par­ties are still re­spon­si­ble for pay­ment of that debt. Which party in­curred the li­a­bil­ity is ir­rel­e­vant. Joint ac­counts are of­ten used by mar­ried cou­ples and oth­ers who want to pool their fi­nances.


The bank views a co-signer and co-owner dif­fer­ently. The re­spon­si­bil­ity of the co-signer kicks in only if the ac­count holder de­faults. If the ac­count holder main­tains the ac­count in good stand­ing and pays any fees in­curred on the ac­count, the bank will have no ex­pec­ta­tion that the co-signer take any ac­tion on the ac­count. A co-signer has lim­ited li­a­bil­ity for the ac­count, un­like a co-owner, who has full li­a­bil­ity for the ac­count and all charges as­so­ci­ated with it.


A co-owner usu­ally has greater ac­cess to the ac­count than a cosigner. The co-signer gen­er­ally does not have ac­cess to make de­posits and with­drawals from the ac­count, serv­ing as more of a guar­an­tor. This be­comes es­pe­cially sig­nif­i­cant when it comes to the funds held within the ac­count. A joint ac­count owner can make de­posits into a joint ac­count. Also, he can gen­er­ally with­draw or spend the money in that ac­count, even if he was not the per­son who de­posited the funds into it. Once the money is in the ac­count, joint ac­count hold­ers gen­er­ally have equal ac­cess to it.

Photo: NAN

•L-R: Plateau State Ac­coun­tant-gen­eral, Mr Cyril Tsyenyil; Com­mis­sioner for Fi­nance, Dr Regina Soem­lat; and Com­mis­sioner for Bud­get and Eco­nomic Plan­ning, Mr Sylvester Wal­langko, dur­ing the 2020 bud­get break­down in Jos... on Tues­day.

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