Bank correctly handled tax information on joint term deposits

Categories:

Transaction errors, Instructions not followed, Investment,

Summary:

Mitchell and his mother Diane had accounts with the bank, including term deposits. In March 2024, Mitchell instructed the bank to open four term deposits using money from four notice saver accounts, two of which were joint accounts with his mother. Mitchell later complained that the bank used his tax number on two term deposits he opened on behalf of Diane. He said this caused him to move into a higher tax bracket and receive a tax bill of $2,000. He said he had authority to operate Diane’s accounts but was surprised to learn the term deposits were set up as joint accounts. He wanted the bank to reimburse the $2,000.

Published:

February 2026

Our investigation

We reviewed account mandates, correspondence, documentation, file notes and phone calls between Mitchell and the bank in March 2024. Earlier mandates showed the accounts were initially in Diane’s name, with Mitchell as an authorised signatory. However, since 2011 the accounts had been joint, in both names, and the current mandate dated April 2020 confirmed this.

During calls on 22 and 24 March, the bank discussed Mitchell’s resident withholding tax and prescribed investor rate. Mitchell referred to the accounts and term deposits as his and did not say he was acting on behalf of Diane. When asked if he wanted the term deposits set up as joint accounts, he said: “Yes, keep it as joint.” The bank explained that if either of them had a higher tax rate, it would default to that. The bank held both of their tax numbers, as required for joint term deposits, and asked appropriate questions about Mitchell’s tax situation. We found no evidence that Mitchell indicated he was acting solely for Diane. The bank was not required to provide advice on other tax matters.