The working procedure of a joint account is different from a non-joint/single account. If you want to withdraw money from a joint account then both the account holder have to agree and sign the check. Or, if both account holders are put as co-owners then any of the account holders can withdraw the money from the joint account and then deposit it into a separate non-joint account. However, if the joint account is a minor, POA, or treasure account then the money withdrawing process is different.
What is a Joint Bank Account?
A joint bank account is a type of bank account that is shared by at least two or more individuals. A joint account can be opened by two or more individuals or entities. The working procedure of a joint account is quite similar to a single bank account. Usually, a joint account is opened between relatives, spouses, business owners, etc. Anyone can deposit money into a joint account but withdrawing money from a joint account is a complicated process. If both the account holders are solely liable for all transactions on the account then any of the account holders can withdraw the money from the joint account.
How does a Joint Account Work?
The operating process of a joint account is similar to other types of bank accounts but there are some differences. If you want to open a joint account then there must be at least two individuals and they can be relatives, friends, business partners, etc. To open a joint account you have to complete an application with the personal details of all the Account holders. You have to provide some documents like a valid photo id, a copy of a utility bill to proof of the address, etc. Moreover, all the account holders have to be present during the account opening time.
All the account holders of a joint account have the equal rights to withdraw, deposit, and manage the funds. Once, the money is deposited in a joint account; regardless of the source of the funds, all the account holders have an equal right to the funds. Usually, it requires all the account holder’s consent to withdraw money from the joint bank account but if every account holder is solely liable for all transactions then any of the account holders can withdraw the money and then put it into a separate non-joint account.
Advantages and Disadvantages of Joint Bank Account
| Advantages | Disadvantages |
| A joint account can help you unifies household finances | The process of tax filing or divorce becomes complicated |
| If you are sharing rent and utility bills with your partner then a joint account can come in very handy | You won’t have any control over the other account holders and how they could use the money |
| A joint account is a much easier way of sharing funds with family members | There is no privacy in a joint account |
| Opening a joint account can save you money on various fees | If any of the joint account holders have debt like personal loans, auto loans, or student loans then it could create a problem |
| The less legal process to get access to the money if the other account holder died | All account holders of a joint bank account can become a victim of one account holder’s action |
Online Money Transfer Rules for Joint Account
Legally it is possible to transfer funds online from one joint account to another bank account but there are some rules and regulations that you have to follow. Check the below tables to find out different online money transferring rules for a joint bank account.
Rules for Online Transfers between Joint Accounts
| Account Ownership | Online Transfer |
| You are the owner of two joint accountsBoth accounts have the same joint ownersAll the account holders have the same social security or tax identification number | Yes |
| You are the owner of two joint accountsBoth accounts don’t have the same joint ownersAll the account holders don’t have the same social security or tax identification number | No |
| You are the owner of two joint accountsBoth accounts have the same joint ownersAll the account holders don’t have the same social security or tax identification number | No |
Rules for Online Transfers between Joint and Individual Accounts
| Account Ownership | Online Transfer |
| You own both the individual account and the joint accountAll the account holders have the same social security or tax identification number | You can transfer money from the individual account to the joint accountYou can’t transfer money from the joint account to your individual account |
| You own an individual account and you are a joint owner on an account you did not createThey have different social security or tax identification number | You can transfer money from the individual account to the joint accountYou can’t transfer money from the joint account to your individual account |
Rules for Online Transfers between IRAs and Joint Accounts
| Account Ownership | Online Transfer |
| You are the owner of a joint account and an IRAAll the account holders have the same social security or tax identification number | You are allowed to transfer money from the joint account to the IRAYou are not allowed to transfer money from an IRA account to a joint account |
| You are a joint owner of an account you did not create and you own an IRAThey have different social security or tax identification number | You are allowed to transfer money from the joint account to the IRAYou are not allowed to transfer money from an IRA account to a joint account |
Rules for Online Transfer to or from Custodial Accounts
- If you are the owner of the custodial account then you can transfer funds online from a single account to your custodial account
- If you haven’t created the custodial account then you won’t be able to transfer funds online from a single account to the custodial account
- If you haven’t created the custodial account then you won’t be able to transfer funds online from a joint account to the custodial account
- If you haven’t created the custodial account then you won’t be able to transfer funds online between an IRA and a custodial account online
FAQs about Is It Legal to Transfer Money Out of a Joint Bank Account into a Separate Non-joint Account
Can a spouse withdraw money from a joint account?
If the spouse is the joint account holder of the bank account then the spouse will be able to withdraw money from the joint account.
Is it legal to drain a joint bank account?
The answer to this question depends on quite a few things. If both the account holders are solely responsible for the transaction of the joint account then any of the account holders can drain a joint bank account and the process is completely legal.
Can a spouse transfer money without permission?
There is no way a spouse can transfer money from a joint account without permission from the other account holder.
Who owns the money in a joint bank account?
All the account holders of a particular joint bank account are the owner of all the available funds. It means that if you are a joint bank account holder then you are entitled to all of the funds along with the other account holders.
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