When opening a checking account at the bank, you may wonder which is the best option. Is it better to open a joint account or an indistinct account ? What if I name an authorized person ? With this article we intend to get you out of this sea of ​​doubts, in order to make the most convenient decision. 

How does a joint account work?

As you know, a checking account can have more than one owner. But not all co-ownership works the same , as that depends on the model. There are two models of bank accounts with more than one holder :

  • The joint or joint account . 
  • The indistinct or joint account . 

The joint account

It is a checking account with more than one holder in which the authorization of all holders is required to carry out any operation. 

When this type of account is contracted, some conditions are set to speed up the day to day , such as, what is the maximum amount to make cash withdrawals or transfers without the signature of all the holders. 

It is also customary, in the case of more than two holders in the joint account , to establish the proportionality of signatures necessary for certain operations , or even to designate one holder as a delegate for the others. 

They are conditions to facilitate the activity of the company, without the usual banking procedures hindering professional work. They protect, yes, the big financial operations yes they will need the signature of all holders of the joint account . 

The joint account is common in cases of common interests , such as: 

  • Professionally. Respond to specific payments between partners of a company, in which there are no proxies who can decide freely. 
  • Personal scope . When it is desired to make explicit that the operations in the account have the agreement of the holders. 
  • Inheritances . When there are several heirs. 

As a general rule, in a joint account the co-owners trust each other , since, if discrepancies arise , the claims service can block the account until the conflict is resolved, thus delaying the transactions.

The indistinct account

This account also has more than one owner, but, unlike the joint account , in this case any of the owners can authorize any operation . 

This is a type of bank account closely related to family use . As the authorization of the other holders is not necessary, it is customary, for example, in the case of a couple who share income and expenses . 

The indistinct, or joint account, is named with the name of all the holders and the conjunction “or” instead of “and” , so that it is explicit that any of the holders can operate without the permission of the rest. 

When problems arise in an indistinct account, these can become serious , such as the management of balances when the link between the holders changes or disappears. It is important to remember that in an indistinct account responsibilities are shared and, therefore, these can be required of any of the holders. 

In any case of joint ownership, it is important to bear in mind that if one of the owners suffers an account seizure. Accounts shared with other holders are also attachable , always in proportion to the available balance and also in relation to the number of holders. 

And what power does an authorized person have?

Both in the joint account and in the indistinct account the figure of the authorized person can be given . It is about linking a third person to the checking account, authorizing them to operate in the account , always without this representing the replacement of the ownership of the account.   

In other words, the authorized person has the advantages of a joint owner , but this does not reduce the original owner’s control. Who is authorized can carry out the operations determined by the owner, although the owner continues to have control of the account , being able to revoke the authorization, not accept operations, etc.

It is important to note that the authorized person is not liable for the debts or assets owned by the account, and that they lose the authorization when the account owner dies. 

Now you know what a joint account is and when it can be more convenient. We hope the information has been useful to you!