You can open a bank account either as a single account holder or as a joint account holder. The joint account offers versatility, and it has its advantages. You would usually be required to make this selection at the time of account opening. In the joint account, the trust and the relationship matter a lot since each of you has access to the account. You can have more than two applicants in a joint account in India. Today, we are going to share some interesting insights about the joint account, and at the same time, we will tell you how to convert a joint account to a single account.
Types of Joint Accounts
There are different types of joint accounts that you can open. Check out some information about them in this section.
- Either or Survivor – This is the most common mode of operation for the joint account. Here, any of the two individuals can operate the account. Both of them have full access to the account. If any one of the persons passes away, the second account holder can continue to operate the account. Example – Father & Son
- Anyone or Survivor – This account is the same as Either or Survivor, but there can be more than two account holders here, and anyone can operate the account. An example is a Mother, Father & Son.
- Former or Survivor – Under the Former or Survivor account, only the primary account holder can operate the account until they are alive. After the death of the primary account holder, the second account holder can take ownership of the account.
- Latter or Survivor – The latter or survivor is somewhat similar to Former or Survivor. However, the difference is that the second applicant has full control of the account, and the first applicant doesn’t have this control until the second applicant is alive.
- Jointly Held – In this type of account, both account holders need to authorize the transaction. If one of the account holders dies, then the second one can’t operate the account. The balance will be paid to the nominee based on the documentation.
- Jointly or Survivor – This account is similar to a jointly held account. However, in case of the death of one holder, the second account holder can operate the account without any trouble.
Tax Treatment in Joint Account
It is important to know the tax treatment in a joint account. In most cases, the income and interest are accounted for in the primary account’s income. Sometimes, the primary account holder may mandate the bank to treat the interest income as per a requirement.
Advantages & Disadvantages of Joint Account
There are some advantages of the joint account. This includes the low balance requirement by two people, allowing two people to manage the funds easily. A joint account may make more sense if you are trying to manage the home’s budget. Couples can even deposit their paychecks in the same account and manage their expense. On the downside, you must ensure you trust your partner when opening a joint account. The second applicant has access to your whole account, so they should not take the trust factor for granted.
How to Convert Joint Account to Single Account?
If you would like to convert a joint account to a single account, then you would need to reach out to the bank and submit an application. It is subject to the approval of the bank manager. Please note that you can’t remove the name of the primary applicant. Moreover, you need to have both account holders present before making the account changes. If one of the applicants dies, the conversion can be done by presenting the death certificate. In some banks, you might not be allowed to convert a joint account to a single account. So, what do you do in such a case? Check it out in the section below.
What If the Bank Doesn’t Support Conversion?
If the bank doesn’t support converting a joint account to a single account, you are only left with one way. You must close the joint account and open a new single account. This problem usually occurs when both account holders are alive. So, you can go ahead and check with the bank manager about the conversion and based on that; you can take a call.
This is how you can convert a joint account to a single account. You can even contact phone banking services to know the process so that you can be prepared accordingly. While going to the bank, don’t forget to take the Aadhaar card of both account holders.