Understanding Bank Account Signers and Authorities

Here are Security Bank, we want to educate our customers on Banking! Understanding your bank accounts and having them set to your particular needs is very important.  

Types of Account Signers and Roles

From a bank’s perspective, there are several types of account signers and related roles to consider. Each role has specific responsibilities and limitations.

Joint Owners

A joint owner shares equal ownership of the account. Both parties have full access to the account’s funds and are equally responsible for any transactions. This arrangement is common among spouses, business partners, or family members. Upon the death of one owner, the funds typically pass to the surviving owner, depending on the account agreement.

Authorized Signers

An authorized signer is granted permission to perform certain transactions on the account without having ownership rights. For example, they can write checks, make deposits, and access account details, but they do not own the account funds. This designation is often used in business or organizational accounts.  An authorized signer is terminated when the owner(s) is/are deceased.

Payable on Death (POD) / Beneficiary

A POD designation allows account holders to name a beneficiary who will receive the account’s funds upon their death. The beneficiary has no rights or access to the account while the account holder is alive. This setup simplifies the transfer of funds without the need for probate. The POD(s) on the account must provide proper identification and a death certificate to the bank  before the account can be closed and funds can be distributed.

Representative Payee

A representative payee is appointed to manage funds on behalf of an individual who is unable to do so, typically due to age, disability, or incapacity. This role is commonly associated with Social Security benefits, and the payee is responsible for ensuring the funds are used for the benefit of the account holder.

Power of Attorney (POA)

A power of attorney grants an individual (the agent) the authority to manage the account holder’s finances. The scope of authority can be broad or limited, depending on the terms of the POA document. Unlike joint owners, a POA’s authority ceases upon the account holder’s death.

Understanding your bank account is paramount! Whether for personal accounts, businesses, or organizations, understanding these roles and implementing clear guidelines helps maintain trust, security, and operational success. Here at Security Bank, we have many experts who can help you. Please give us a call or stop by – we are here to help you. We are Here for Good!