Can More Than Two People Share a Joint Bank Account?

Though joint bank accounts are usually shared by two people -- a husband and wife, for instance, who use the account to pay bills -- more than two people can, indeed, share a joint bank account. Joint accounts always call for some advance decisions and understandings to make sure that there won’t be problems sharing the account. This is even more important when three or more people will use the account.

Before opening the account, the would-be co-owners need to decide who will maintain it. For instance, someone would need to balance a joint checking account every month to make sure the bank’s record of transactions match the owners’. Other issues include how to record the transactions of three or more people into one log, how and when each co-owner will use the account and how account information will be shared between owners. No matter who’s at fault, if something goes wrong with the account, every owner is responsible for it.

The people holding a joint account share the account’s money, no matter who deposited it. What happens to the money if one of them dies? -- this must be decided before opening the account. Usually, accounts are set up so that the money will go to the surviving account holders. The account holders are said to be joint tenants with rights of survivorship -- JTWRS. The other option is to open a tenants-in-common account. In this option, account holders each own a set percentage of the account’s money. If a shareholder dies, the shareholder’s beneficiary inherits his share.

Tenants-in-common accounts require the signatures of all shareholders to conduct a transaction. This could head off trouble. For instance, everyone will know exactly what is coming out of the account and when, preventing someone from mistakenly taking too much from the account. In JTWRS accounts, anyone can make a transaction without the other account holders knowing. To avoid problems, the shareholders can open the account as a joint or dual signature account. Then, everyone must sign off on any transaction. Such measures are inconvenient, though. An alternative is to assign one person the duty of withdrawing money when it’s needed.

If the joint account is to be a checking account, owners should realize that the printed checks don’t have to list all the account holders’ names. For instance, two parents and a college student may share an account only to make it easier for Mom and Dad to transfer in money for college expenses. Meanwhile, the only person who will actually be writing checks is the student. To avoid confusion, it may be best for the student’s name alone to appear on checks.