When you open a joint bank account you should read your bank account rules on death. Here's why it matters (2024)

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• Joint bank account owners have full access to the account at any time.
• If one bank account owner dies, the surviving owner has complete control of the account.
• Consider whether it's better to add an account beneficiary instead of opening a joint account.
• Read more stories from Personal Finance Insider.

Opening a joint bank account is different from opening up an individual bank account. Both owners have full access to a bank account, and joint bank account rules also dictate specific actions if one owner dies.

We'll walk you through the rules on survivorship and guide you through possible alternatives to consider if you decide you don't want to open a joint bank account.

What happens to a joint bank account when one person dies?

When you're opening up a new bank account, you'll receive a bank account agreement that lists the bank's conditions and rules. Many banks have a rule of survivorship in their joint bank account agreement.

The rule of survivorship states if you open a joint bank account and one person dies, the surviving owner has the right to take over the account.

Sophia Bera, CFP® professional and founder of Gen Y Planning, says it doesn't matter whether the deceased owner put in more money — the account would still go to the surviving owner.

"If you have $20,000 in a joint bank account with your boyfriend — you put in $18,000, and he's only put in $2,000 — and you pass away, that account is not going to your family. It's going toward your boyfriend," says Bera.

Once the surviving owner presents a death certificate to the financial institution, the account will be updated and belong solely to them.

If your financial institution doesn't specify rules on survivorship, you may be able to add a beneficiary instead. In this instance, the surviving owner and beneficiary would both have access to the account.

Additional rules to keep in mind with joint bank accounts

When you open a joint bank account, Bera also suggests being mindful of another bank account rule — equal withdrawal rights.

"A lot of cohabitating couples who are living together, who are unmarried, consider setting up a joint bank account to share expenses," says Bera. "The con that people don't realize until they're in a bad situation is that if one of you just wants to go to the bank and withdraw all the money in that joint account, they can. Just because you're joint doesn't mean that 50% of the money is yours in that account."

As a result, you will want to make sure that you have a solid personal and financial relationship with the other person before you open a joint bank account.

You also may need to communicate and monitor your bank account if your financial institution charges common bank fees like monthly service fees, overdraft fees, and ATM fees.

"Both people are using it. It's harder to know what money is coming in and out of there. You could get hit with overdraft fees," adds Bera.

Alternatives to opening a joint bank account

Bera says she doesn't recommend joint bank accounts for unmarried couples since there could be significant differences in the way you manage money.

"If one of the owners got into some credit card debt and wanted to use that joint bank account to pay off the credit card debt, there's really nothing that the other account owner can do," says Bera.

Bera also notes that joint bank accounts may not be ideal banking options for family members.

"I've seen it go both ways. The parent being irresponsible or the child being irresponsible with that money," says Bera.

Instead, she recommends assigning a bank account beneficiary in these circ*mstances. A joint bank account beneficiary can't deposit, withdraw, or view your bank account when you're alive. They may only access the account when you die.