Co-Signer vs. Co-Owner of Bank Accounts

Having a bank account can make purchases and bill-paying more convenient. It may also permit you to receive direct deposit from your job. You can open a bank account in your name alone or with another person. Whether that person signs up as a co-signer or co-borrower will determine his obligations on that account.


A co-signer is someone who agrees to be financially liable for a debt if the borrower does not pay it. For bank accounts, this debt may include overdrafts, bounced checks, unpaid maintenance fees and other fees that occur on the account. If the account holder racks up fees on the account and does not, or cannot, pay them, the bank will expect the co-signer to cover the debt. A co-signer does not have to be a relative, but must be someone who agrees to take on that degree of responsibility.


A co-owner is a joint account holder. All signers on a joint account have equal liability for the account. This liability is present the moment the account holders sign for the account. If the behavior of one of the account holders leads to an assessment of fees on the account, both parties are still responsible for payment of that debt. Which party incurred the liability is irrelevant. Joint accounts are often used by married couples and others who want to pool their finances.


The bank views a co-signer and co-owner differently. The responsibility of the co-signer kicks in only if the account holder defaults. If the account holder maintains the account in good standing and pays any fees incurred on the account, the bank will have no expectation that the co-signer take any action on the account. A co-signer has limited liability for the account, unlike a co-owner, who has full liability for the account and all charges associated with it.


A co-owner usually has greater access to the account than a co-signer. The co-signer generally does not have access to make deposits and withdrawals from the account, serving as more of a guarantor. This becomes especially significant when it comes to the funds held within the account. A joint account owner can make deposits into a joint account. Also, he can generally withdraw or spend the money in that account, even if he wasn't the person who deposited the funds into it. Once the money is in the account, joint account holders generally have equal access to it, according to Wells Fargo.