The simplest definition of a joint account, as the name shows, is a bank account that is shared between two individuals. It operates the same as a regular account, requiring two or more registered users to have it. People usually open a joint bank account with their business partner, spouse, friend, or relative, in short with someone they are familiar with, and have trust bonding. Both individuals can have access to the funds available in the account. It has some disadvantages as well, which we will cover later in the article. Suppose something goes wrong, and you want to end that account. In such a situation, you might want to know can a joint account be frozen or put differently, can they free you from a joint account. Let’s explore the answer.
When you open a personal account, you have all the rights to funds coming into or going out of your account. If you ever try to access the funds without your authorization, anyone other than you is committing a heinous crime. As the account is opened in your name, you are the owner of the account. In a joint account, things are pretty different. In a shared account, everyone involved can have access to funds, deposit money, and manage the account.
Nevertheless, there may arise a situation where one individual wants to close this account. Here the question arises can a joint account be frozen? Can a bank grant your wish? Keep reading, and you’ll find out.
How a bank is going to freeze your joint account varies from bank to bank? Generally, freezing an account happens at the request of either the court or the account holder. You can contact your financial institution or bank and make a request to freeze your account. They will help you out after getting the necessary details from you.
Can a Joint Account be Frozen By Bank?
A joint account may seem beneficial if you want to help someone with their finances or if you want to divide your daily expenditures, but it comes with certain drawbacks. Let’s discuss why you should avoid a joint account.
Why Should You Avoid a Joint Account?
While you can share money with whomever you want, joint accounts have certain drawbacks, i.e., there is no financial privacy. If there is an emergency, you cannot withdraw money without the permission of the other account holder. If you share an account with any of your children, they may become more dependent on you for their expenses. In that way, if one account holder misuses the funds, the other will be liable. Your account is all yours, and you do not have to give someone an explanation if you’re taking money out of it. A joint account is entirely a shared account. If you’re thinking about freezing your joint account, or if you don’t know, can a joint account be frozen? Let me make it easy for you.
Before we proceed further, let’s have a look at what a joint account is.
What is a joint account?
A joint account is a shared account between two individuals. These individuals may range from married couples, adult partners, parents, and children or business partners.
Moreover, a joint account allows the individual named on the account to access the funds available. There are several and policies for opening a joint account about managing funds if one of the account holders dies.
No doubt, the joint account has some advantages if you want to divide the financial budget or help someone take care of their expenses. The negative side, however, cannot be neglected as they can make your tax situation hard.
What is a Frozen Account?
There can be numerous reasons why your account gets frozen, and each reason requires a different solution to unfreeze it. With a frozen account, you are unable to process any transaction. The most common reasons for freezing an account include orders from a court, bank policies, and on request of the account holder.
Court orders only order to freeze an account due to unpaid debts either to creditors or the government or in case law enforcement suspects some illegal activity is happening via account.
Understanding Frozen Account
You can not make any debit transactions with the frozen account. To elaborate, you cannot withdraw money, make a purchase, or transfer from a frozen account. However, the account holder of a frozen account can deposit or transfer funds into the account.
To make it clear, you can transfer money into the frozen account but cannot withdraw it. There is no time guarantee when your account will be raised from the freeze. But once the account holder completes all the requirements, the bank will make the account work as soon as possible. Coming back to the central question of the article, Let me answer can a bank freeze a joint account.
A bank can freeze a joint account if you provide them with the right reasons or a creditor wins a lawsuit against you. Also, if one of the account holders wants to freeze an account, they can do so. If you are in a situation like that, contact your bank. They will ask some questions and ask you to do specific steps to freeze your account.
After making a request, the account holder who wishes to freeze the account must write a letter to their financial institution to solve any dispute over available funds.
If you are operating a joint account with two or more individuals involved and find out your account is frozen, the best thing is to contact the bank.
Reasons Why Banks Freeze a Joint Account
Can a joint account be frozen? I hope you know the answer by now. Here you might further want to explore the reasons why banks freeze a joint account.
As described earlier, if some law-breaking activity is happening on your account, your bank can freeze your account immediately. Other reasons can be when a cardholder fails to make due payments or at the request of one account holder.