Opening a joint account

Dear Michelle,

Can my spouse and I open a joint account?

~ For Love and Money

Dear For Love and Money,

Not really.

In Korea, we have the "Korean Real Name Law" which mandates that many bank transactions be done in person that can normally be done on the phone, by fax, or online in other countries. This is a federal regulation that must be followed by every Korean bank.

It is also this same Korean Real Name Law that requires that every account be opened in only one person’s name. Therefore, joint accounts do not exist in Korea – at least not in the way we might be used to back home.

There is actually only one kind of joint account that is possible to open in Korea. If you open this account though, both parties must visit the bank in person to do every single type of transaction including just basic cash withdrawal and deposits. It is not even possible to get an ATM card for this account because every transaction requires that both account holders be present to sign the forms in person at the bank. So, “why would anyone ever open this type of account?” you might ask. Well, it is not the usual way for a couple to manage their funds, but it may be used by some informal associations in order to maintain accountability. With two people responsible for every single account transaction, fraud may be less likely.

But, back to your question. Most couples choose to have just one person in the couple be the primary account holder who opens an account. Then, the spouse (and / or other family members) of the primary account holder can be issued an extra family check card that allows limited access to the account. The family check card holder can make only basic transactions though, including ATM withdrawals and purchases at retailers. In this case though, only the primary account holder will be able to make other types of transactions such as remitting money overseas or closing the account. If the primary account holder is eligible for a credit card, additional family credit cards can be issued to the family members as well.

Although it is a touchy subject, it is worth mentioning that the joint account can create difficulties for the non-primary account holder in the event that the couple breaks up. In this situation, the primary account holder has the power to cancel the family check cards and credit cards leaving the spouse with absolutely no recourse to access the account. Please keep this in mind.

(Submit your banking questions to farnsworth@shinhan.com)

“Dear Michelle: Banking Advice for Foreigners in Korea” is a monthly column written by Michelle Farnsworth. Michelle is a 9-year resident of Korea who is currently the Foreign Client Relationship Manager in the Shinhan Bank Foreign Customer Department. Please visit the “Shinhan Bank Seoul Global Center” on Facebook for more information. Also, please note that the banking information provided in this column is based on Shinhan Bank policies and may not be applicable to all banks in Korea.