Can an Authorized Signer Withdraw Money?

An authorized signer on a bank account is an individual granted permission by the primary account holder to conduct various transactions. This designation allows someone to manage funds without holding ownership of the account itself.

Understanding the Authorized Signer Role

This designation is typically established when the primary account holder completes specific bank documentation. It represents a grant of authority, not ownership, meaning the authorized signer acts on behalf of the account owner. This arrangement is common in various scenarios, including business accounts where owners delegate daily financial tasks to employees, or personal accounts where individuals need assistance managing their finances. The account holder retains full ownership, and the authorized signer’s access is contingent upon the owner’s continued authorization. This role provides convenience by allowing another person to handle banking activities.

Scope of Withdrawal Authority

An authorized signer typically possesses the ability to withdraw money from the designated account. This generally includes making cash withdrawals at bank branches, utilizing a debit card if one is issued to them, or writing checks against the account, provided they have check-writing privileges. Their authority extends to transacting with the available balance. While authorized signers can access funds, their powers are generally limited to transactional activities and do not extend to altering the account’s fundamental structure or ownership. Some financial institutions may allow account holders to set specific limitations on an authorized signer’s withdrawal capabilities, such as daily ATM limits or requiring dual signatures for checks exceeding a certain amount, for example, over $1,000. These optional safeguards can provide an additional layer of control for the account owner.

Authorized Signer Versus Other Account Access

The role of an authorized signer differs significantly from that of a joint account holder. A joint account holder possesses ownership rights to the funds, granting them equal access and responsibility for all account activities, including the ability to close the account. This shared ownership means that upon the death of one joint owner, the funds typically transfer directly to the surviving owner, depending on the account agreement. In contrast, an authorized signer has no ownership claim to the funds, and their authority to act on the account typically ceases upon the primary account holder’s death. Furthermore, an authorized signer’s authority is distinct from a Power of Attorney (POA). A POA grants broader legal authority, allowing an appointed agent to manage various financial and legal matters on behalf of the principal, often extending beyond a single bank account. A durable POA remains effective even if the principal becomes incapacitated, whereas an authorized signer’s authority is generally limited to the specific account and may terminate upon the account holder’s incapacity. The agent under a POA also typically has a fiduciary duty to act in the principal’s best interest, a legal obligation not inherently placed on an authorized signer.

Key Considerations for Account Holders

Account holders bear the ultimate responsibility for all activities conducted on their accounts, including any transactions initiated by an authorized signer. This means the primary account holder is accountable for overdrafts, fees, or any misuse of funds by the authorized signer. Therefore, choosing a trustworthy individual for this role is paramount. Clear communication with the authorized signer about the purpose and limits of their access is advisable. Should the need arise, the account holder can revoke an authorized signer’s status at any time by contacting the bank and completing the necessary paperwork. This process typically involves submitting a formal request and may result in the deactivation of any debit cards issued to the removed signer.