Hello ,
I will be starting a forex acct. with fxcm soon, My closest friend will be funding my account. but I will be the one trading should I start a joint account or is an individual account enough ? What is the difference exactly between a joint account and an individual account .
Hi Thanos,
With an individual account, only one person has claim to the funds inside the account. Only the account holder has the right to deposit or withdraw funds. With a joint account, either account holder has the right to deposit or withdraw funds.
To decide which setup might be best for you and your friend, consider the following options:
[ol]
[li][B]You are the trader, but the money will belong to your friend.[/B] In this case, your friend should open an individual account in his own name. Then you both can complete a Limited Power of Attorney form. This would allow you to trade his money, but only he would be able to deposit and withdraw funds.
[/li][li]
[/li][li][B]The money in the account will belong to both of you.[/B] In this case, you and your friend can open a joint account. Both of you would have the ability to deposit funds and withdraw funds back to your bank accounts.
[/li][/ol]
Which option fits your situation better?
Jason
Jason,
What if you don’t sign a limited power of attorney, but the friend shares the account details with you? You would still be able to trade, right?
Thanks!
Jasper
Hi Toekan,
If you will be trading your friend’s money, it is a good idea to document this relationship using a Limited Power of Attorney form. That way, if you ever have to call FXCM about this account (for example: if you lost internet connection and needed to place a trade by phone), you would be able to do that, since we would have a record on file of you being the trader for this account.
That said, it’s possible your situation is unique and does not exactly fit either of the two scenarios I described in my previous post. If that’s the case, and you’d like to speak with one of our account specialists, please feel free to send me a private message with your contact details. I can have one of my colleagues follow up with you to discuss your options.
Jason
Thank Jason… I am happy with the answer. I was just wondering what the advantage was.
My pleasure, Toekan :22: