As a popular savings vehicle, certificates of deposit (CD) tend to generate higher interest yields than traditional savings bank accounts. Joint ownership involves two parties who are willing to assume full rights and liabilities for the account. They share a fundamental attitude that "what's mine is ours." Regardless of who deposits the fund, each joint owner has the right to withdraw the funds or close the account. Both owners can be held responsible for paying any fees owed.
Step 1
Shop around for high interest yields. Compare the CD rates offered by different banks for the term of the CD you are interested in purchasing, such as 6 months or 1 year to maturity. Bankrate.com provides free online comparison of the CD annual percentage yields (APYs) published by local and national banks (see References).
Step 2
Appear in person at the local bank. Most banks require both parties to appear with one or more forms of photo identification. From the bank's perspective, government-issued photo IDs, such as your driver license and passport, offer a secure way to establish your identity by enabling the bank to match your appearance to the photograph. Both owners are required to sign the account documents.
Step 3
Purchase joint CDs Online. Online banking offers an attractive alternative to brick-and-mortar banking. Online banks, such as ING Direct, offer highly competitive interest rates as a result of their lower overhead costs compared to traditional banks. Either one of the joint owners can authorize electronic transfer of funds to and from another bank account that is held jointly or individually. Follow the verification procedures for the individual online bank to purchase joint CDs.
Step 4
Provide your Social Security numbers. If the joint CD owners are U.S. citizens or permanent residents, both are required to provide their Social Security numbers on the purchase documents. Interests earned on CDs are taxable income that must be reported to the Internal Revenue Service (IRS). The bank is responsible for sending you an IRS Form 1099-INT annually that summarizes the interests earned and any early withdrawal penalty you may have incurred. While both owners' names appear on the 1099-INT, only the Social Security number of the primary owner is used for tax reporting.
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