Can either partner in a joint account close the account?

This will depend on how the account was set up in the first place. There are essentially two types of joint account, known as ‘one to sign’ or ‘both to sign’. This refers to the way the account operates: either both parties are permitted to carry out all transactions independently or both have to give authorisation for certain transactions to take place, such as withdrawals or closure of the account. When you open your joint account, you’ll have to decide exactly how you want it to operate and which permission system to use.

How do joint account authorisations work?

In circumstances where more than one person’s permission is required to authorise payments from a joint account, the primary or authorising account holder can receive notifications about their account in a variety of ways. Some banks use SMS text messages, whereby the primary account holder has to input a code sent to their phone. Others use mobile phone notifications, where a person receives a message that their authorisation is required and has to log onto a particular app with their security details to authorise the payment. In other circumstances, emails or online platform notifications are used.

Who pays tax on the interest earned on a joint account?

If both account holders are aged over 16 and under 65 and usually pay income tax, the tax is split 50/50 between each account signatory. Young people under 16 are exempt from paying income tax on account interest, and those aged over 65 are subject to ATO deeming tax regulations.

Can more than two people open a joint account?

Yes – a joint account or term deposit can be opened by more than two people or even multiple entities. For example, adult children may open a joint account with their elderly parents, where all account holders can use a separate debit card to pay for shopping or pay bills. A company may have several directors, while a not-for-profit or trust may have multiple trustees who operate the joint bank account.