What Should I Do if My Family Member Wants To Have Access to My Savings Account?

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One of the biggest challenges to talking about money is that for years everyone has been told not to, and now no one has the training and resources to do so. When it comes to your personal finances, knowing the difference between being generous and getting taken advantage of can come down to having hard conversations. No matter if it is someone you care about asking for cash or access to your high-yield savings accounts or checking account, make sure to prepare yourself for how to handle it.

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How To Talk To Your Family About Money: 9 Tips

It’s one thing to make transactions in a brick-and-mortar bank or credit union, but it is an entirely different thing to transact with a family member without any formal or legal protection. Though the best intentions might be on both sides, if you are uncomfortable with giving someone in your family access to your savings account here are some tactics you can implement:

1. Be Empathetic

Talking to your family shouldn’t be scary but it can be awkward when it concerns money. Try to empathize with their situation. Even if you cannot help them, explain to them why not how you would want to be told.

2. Have Boundaries

Set clear boundaries about the duration of the loan and repayment plan. For example, instead of giving them access to your savings account, you can loan them a one-time amount of $500 to be paid back in $100 installments over six months.

3. Set Up a Loan

Loaning people money is different than giving them access to your account so make sure to stick to your convictions as to how or whether you want the exchange to occur. Helping them once is much easier than granting them access to any of your deposit accounts.

4. Communicate Your Savings Goals

If you have a high-yield savings account to help you reach your savings goals, make sure you let them know that by taking money out of that account it will affect your interest-earning potential.

5. It’s OK To Say “No”

Be firm in your convictions. If you don’t want to lend them money or grant them access to your accounts say “no” and stand by it. There is a difference between helping and enabling.

6. Watch for Problematic Behavior

Giving someone access to your savings account or any other financial product means they can take funds at their discretion which could be problematic, even with a family member you trust.

7. Be Clear About Repayment

Make sure you set clear parameters for any loan or access, and get all the information needed about why they need the money and how they will repay you.

8. Discuss the Account Features

If you do grant a family member access to your bank, make sure they know the features of the account such as minimum balance requirements, monthly maintenance fees, minimum deposits or minimum opening deposits.

Consider this: a CD locks your cash away for a specified amount of time, depending on the term you sign up for–otherwise you could get hit with an early withdrawal penalty fee. It might be one way to keep your money saved, without having to withdraw any funds.

9. Remind Them That the Money Must Be Repaid

If you want to help someone with just a loan, make sure the recipient understands that you are not just giving them the money but that it is to be paid back.

Protecting Your High-Yield Savings Account

What your high-yield savings account offers you is the chance for a safe way to grow your money through the savings account interest rates, annual percentage yield, or APY. Be cautious when granting access to someone else, even if they are family because it could affect how much you are able to put away at the end of the day.

Here are some questions to ask yourself before opening up your national bank account to anyone else:

1. Is the family member good with money or responsible when it comes to debt?
2. Is it better to help this person open an account on their own or give access to yours?
3. Are you comfortable enough to do without the money you are loaning?
4. Do you think this family member will be able to reimburse you?
5. What happens to your relationship if they aren’t able or refuse to pay you back?
6. What are your other options if you are uncomfortable with granting them access to your savings account?

Final Take To GO 

The bottom line is, that like your standard bank account, even the Federal Reserve is FDIC-insured. There are reasons why your bank savings are so protected to be very careful who has access to that information and those funds. This doesn’t mean you can’t loan family members money or put them on as an account holder, but make sure you weigh the pros and cons before doing so.

FAQ

Here are some answers to frequently asked questions about savings accounts and how to handle access to yours.

• What is a savings account account?
  • In simple terms, a savings account is a deposit account where you can safely put your money, and have it be FDIC-insured for up to $250,000.
• What is a savings account best for?
  • A savings account, especially a high-yield savings account is best for specific savings goals where you can earn interest. For example, have a savings account that is your emergency fund where you have at least three to six months’ worth of expenses to cover you in case of you lose a job unexpectedly or have a medical emergency for which you need to pay out of pocket.

This article originally appeared on GOBankingRates.com: What Should I Do if My Family Member Wants To Have Access to My Savings Account?