Bank Account Signatories

Bank Account Signatories

Bank Account Signatories
Bank Account Signatories

Bank Account Signatories

Bank account signatories are individuals authorized to conduct transactions on a bank account. Organizations like businesses, nonprofits, trusts, and estates designate signatories to operate accounts and handle money movement according to specified permissions. Understanding signatory roles, powers, and best practices allows properly administering accounts.

This guide will examine signatory types, account authorities, designation processes, documentation requirements, and tips for managing multiple signatories smoothly. Implementing clear signatory plans safeguards accounts when more than one person accesses funds.

What is a Bank Account Signatory?

A bank account signatory is an individual granted authority to conduct transactions on a bank account:

  • Signatories access accounts to handle deposits, payments, withdrawals and transfers
  • Banks require account agreements establishing signatory privileges
  • Common signatories include business owners, trustees, executors, attorneys
  • Signatories must provide verified identification and documentation
  • Ongoing account maintenance duties can be assigned to signatories

Proper bank protocols dictate who banks allow accessing and managing account activities.

Signatory Examples

Common signatory examples include:

Business Accounts – Owners, partners, officers, or employees named as authorized signers

Trust Accounts – Trustees or successor trustees named as controllers

Estate Accounts – Executors or administrators designated as account managers

Attorney Accounts – Clients providing lawyers ability to handle funds in trust

Powers of Attorney – Individuals appointed by POA granted account powers

In each case, banks formally authorize specified individuals as eligible signers on accounts in defined capacities based on account holder wishes.

Types of Signatory Authority

Banks allow granting tailored powers to individuals based on the type of authority designated:

Full Authority – Unrestricted access including withdrawals, transfers, payments, and deposits. Often used for primary account holders.

Limited Authority – Specified constraints like maximum daily withdrawal amounts. Useful to limit employee access.

Temporary Authority – Powers granted short-term and revocable, like allowing temporary account managers.

View-Only Authority – Ability to view statements and activity but not conduct transactions. Handy for oversight.

Grant signatory capacities aligned with account needs and risk management preferences when designating multiple account users.

Joint Account Signatories

Joint accounts have signatories who all maintain full privileges over the account:

  • Each co-owner on joint personal accounts acts as a full signatory
  • For joint business accounts, designated positions grant signatory powers
  • All joint owners can fully access account independently
  • Withdrawals by any joint party are fully binding

Joint accounts typically have fewer restrictions since parties either fully co-own funds or serve defined business roles.

Business Account Signatories

Companies may authorize various employees as business account signatories:

  • Owners and executives act as primary full signatories
  • Additional staff may get restricted powers for basic transactions
  • Dual authorization processes create overseers approving actions
  • Access can be revoked immediately when employment ends

Proper business controls govern signatory actions like payment approvals and oversight.

Trust Account Signatories

Trust funds require clear trustee and successor designations:

  • Trust documents establish trustees who act as account signatories
  • Successor trustees also named to assume powers if a vacancy occurs
  • Grantor providesOpening direction on naming trustees with account access
  • Clear fiduciary duties must be fulfilled by designated trustees

Given sensitivities of handling trust money, designation processes uphold grantor wishes and trust legal obligations.

Requirements to Become an Authorized Signer

To grant signatory status at most banks, required steps include:

  1. An account holder resolution or corporate authorization documenting appointed signers.
  2. Signatories providing valid identification documents like driver’s licenses and proof of address.
  3. Signed account agreements acknowledging terms by granted individuals.
  4. Signatory specimen signature form filed for account records and verification when conducting transactions.

Proper documentation ensures signers can be validated when managing accounts according to granted capacities.

Changing Bank Account Signatories

To modify existing signatories, the account holder must:

  • Pass an updated corporate resolution or appointment naming the new signers
  • Deliver new signature cards for the updated designated individuals
  • Revoke prior account access like debit cards from those removed
  • Formally notify bank of the authorized modifications in writing

These formal steps prevent unauthorized changes and provide a proper paper trail of assigned authorities.

Can a Signatory Add Another Signatory?

Existing signatories cannot designate new signatories on their own. Only account holders have power to make signatory changes:

  • The account holder provides updated authorized signer resolutions
  • New signatory approvals require account holder consent
  • Attempting to add signers without proper account owner authority constitutes fraud

This separation of account holder designation and signatory powers provides necessary oversight.

Signatory Requirements for Checking Accounts

Typical policies for checks include:

  • Only designated check signers can sign checks
  • Checks above a threshold may mandate two signatures
  • Account holders control which names are printed on check stock
  • Only provided signers may place check orders with bank
  • Checks presented by non-signatories can be refused for cashing

Proper checks and balances like dual authorization and signing rules safeguard business checking.

Signatory Requirements for Savings Accounts

For savings accounts, common signatory requirements include:

  • All designated signers can make withdrawals and transfers
  • Phone, online, and in-person distributions must follow bank identity procedures
  • Maximum daily withdrawal limits may restrict individual signer powers
  • Two signers may be required for large cash withdrawals

Similar to checking accounts, prudent limits control signatory actions on savings accounts.

Signatory Requirements for Loans

Loan signatories should meet bank standards:

  • Good credit history helps loan approval odds
  • Sufficient income to reasonably assume required payments
  • Partner signers ideally strengthen the loan application
  • Review loan documents to understand implications of co-signing

Becoming a loan signer creates a legally binding responsibility to repay. Consider carefully before becoming jointly obligated.

Best Practices for Multiple Signatories

Guidance for smooth administration with multiple signers:

  • Share account statements so all parties have visibility
  • Require approval documentation for large expenditures
  • Set stricter controls on online or phone transfers
  • Enforce dual authorization steps for big transactions
  • Split duties like reconciliation and withdrawing between parties
  • Document policies governing actions permitted within signatory powers
  • Meet periodically to review account activity collectively

Defining expectations avoids confusion from unclear or overlapping accountabilities when multiple signatories collaborate.

Liabilities of an Authorized Signer

While powers enable access, signatories also assume liabilities:

  • Financial responsibility for any errors or fraud committed
  • Fiduciary obligations to act in entity’s best interests
  • Requirements to uphold account terms and conditions
  • Joint and several liability for debts if a co-signer
  • Potential personal consequences for account misuse

Understand obligations tied to signing authority and use powers judiciously before accepting designation.

Can a Bank Account Signer Deposit Money?

Yes, authorized signers can deposit cash or checks into accounts under standard deposit procedures:

  • Must use proper deposit slips tied to account
  • Signed receipts as documentation for cash deposits
  • Endorse any third party checks writing “For Deposit Only”
  • Have valid ID if unfamiliar to branch staff
  • Adhere to any duplicate deposit detection procedures

Proper controls allow signers deposit abilities while preventing potential check fraud and improving accounting records.

Can a Signer Close an Account?

Account closing authority depends on the signatory powers granted:

  • Primary personal account owners can close accounts unilaterally
  • Joint account holders may enact account closure without other owner consent
  • Business signers usually lack closure authority without owner approval
  • Limited powers like “deposits only” prevent closing accounts

Account holders determine level of authority when assigning signer privileges. Closing ability requires explicit grant.

How to Revoke Signatory Authority

To revoke signing powers, account holders must:

  • Pass updated corporate resolutions or appointment notices cancelling prior signers
  • Notify bank in writing of revocations and provide updated documents
  • Obtain final accounting or statements from exiting signatories
  • Change account passwords, order new cards/checks
  • File documents noting any signatory changes

Following similar formalities as granting authority provides clear documentation and prevents unauthorized account access.

The Bottom Line

Defining proper signatory roles lays the foundation for smooth account administration while safeguarding funds when multiple parties handle transactions. Carefully documenting authorities, keeping records reconciled collectively, designating limited powers judiciously, and revoking access immediately upon changes in status protects all stakeholders. While signers enable convenient usage and distribution, checks and balances governing signatory actions uphold integrity when accounts involve more than one authorized party.

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