Published in: Banks | Aug. 3, 2019
By: Lyle Daly
If you got a bank account as a minor, then it was probably a joint bank account with one of your parents as the other account holder. Most banks won't let a minor open an account alone, so a joint account is the only option.
While a joint account is a great way to get started with banking when you're young, you shouldn't keep using it as an adult. At that point, a bank account that's solely in your name is a must, because continuing to use your joint account could end up costing you.
Using a joint bank account may not seem like a big deal, especially if it has been smooth sailing up until now. Although you could have no problems with a joint account, there are several risks involved.
Your parent can withdraw money from the account. On joint bank accounts, both account holders have full access to the balance. It doesn't matter if you're the only one depositing money, the other account holder could withdraw it all.
Sadly, plenty of young adults have lost money because they had a joint account and their parents made a withdrawal. I imagine that most parents wouldn't do this, but regardless, it's safer to be the only person who can access your money.
Money in the account could be seized for your parent's debts. Even if your parent would never touch your money, when they're an account holder, it's considered one of their assets. That means if their assets are seized, it could include the money in the account.
There are many situations that can result in a seizure of assets, and it's often the result of unpaid debt. For example, if a parent owes the IRS back taxes or they have a judgement against them in court, it could lead to a seizure of any cash in your joint bank account.
Your transactions won't be private. When a parent is on your joint bank account, they have all the same privileges that you do, which means they could access your transaction history. Depending on how private you are, this may not matter to you, or it may be your worst nightmare.
Opening your own bank account is a simple process. All you need to do is:
Once you have your own bank account, it's time to say goodbye to your joint account. Here's the process to do so:
By the way, if your parents occasionally deposited money into your joint account to help you out, they can also transfer money to your new account as long as they have the account information. So you don't need to keep a joint account open solely for this reason.
A joint bank account is a valuable tool to protect your money and to learn how banking works as a minor. Once you reach adulthood, it's in your best interest to get your own account that's exclusively yours. You'll avoid the possible risks of a joint account, and you'll be taking an important step towards financial independence.
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