A bank authorization letter is written to the bank to grant someone else power over your account. Depending on the kind of account and bank, this can be anybody from your business partner, family member, etc.
By sending this letter, you automatically grant another user power to perform transactions on your account. For this to be successful, the bank would need your express permission.
In this article, we will learn how to give someone authority over your account and, more importantly, how to write a bank authorization letter.
There are different ways to give someone authorization over your account. To be sure of the most effective, contact your bank and confirm their preferred method.
Here are some of the most ways to give someone authority over your account:
A financial power of attorney is a legal document sent to the bank transferring power over your account to someone else. By sending this letter to your bank, the authorized individual has the power to transact on your account to a certain degree. By giving someone financial power of attorney, you can grant them the following:
Steps to granting financial power of attorney:
These two methods are different ways to grant someone access to your account. While they both give another person access to your account, they are fundamentally different in terms of the kind of power they grant to the authorized person.
Convenience account: A convenience account is where a third party can access your account but only perform transactions on your behalf. They can only access your account to pay your bills and cannot withdraw the funds themselves. Convenience accounts aren’t open in every state, so you would need to contact your bank to inquire if this is a viable option for you.
Joint Account or Co-owner: This type of account gives another person the same ability you have as an owner. By authorizing someone a joint owner, it stops being your account entirely. This is common for business accounts and not personal accounts.
Before deciding to open a convenience account or make someone a co-owner of your account, you need to be sure you understand the risks involved. You may want to visit your lawyer or your bank to ensure you fully understand what you’re embarking on.
An authorization letter is a consent letter written to a bank by an account holder allowing a third party to have access and transact with their account. There are multiple ways this can be done. You can call the bank to give access to someone else or write a letter of authorization.
Depending on your bank, you may be required to submit a notarized letter or perform other verification procedures.
A bank authorization letter is an official legal document. As such, it must be written carefully. This section of this article will list the steps you must take to write a bank authorization letter.
The first part of your letter should begin with you identifying yourself. This means beginning with your name, account information, and identification documents. The identification documents could be any official document that accurately states your name and other relevant information.
An example of this is, “My name is (state your name), and I am writing this letter to authorize (name of a third party) access to my account (state account number). My identification number is (state ID number), and a copy of my identification number has been attached to this letter.“
In this section of the letter, state how much access the third party can have. If they can only withdraw a certain amount, state that in your letter.
If they’re forbidden from accessing other parts or functions of your account, ensure to include this. When writing this part of your letter, you must pay close attention. Because if not written properly, you could allow unfettered access to your account.
One of the most important things to include in a bank authorization letter is a start and end date. This tells the bank how long the authorization is supposed to last.
[Your name] [Your address] [Your phone number and email] [Date] [Bank's name] [Bank's address] [Bank's contact number] RE: Authorization Letter Dear [Recipient's name], My name is (state your name), and I am writing this letter to authorize (name of a third party) access to my account (state account number). My identification number is (state ID number), and a copy of my identification number has been attached to this letter. I authorize (third party’s name) to have (state the kind of access you want them to have) from today (include today’s date) till (include end date) Please get back to me if you have any questions or inquiries. Kind Regards, (Your name and signature)
RE: Authorization Letter I (your name) give full authority to (third party's name) to handle my account and act on my behalf about transactions under (account number) with (bank name) bank. I give full access for the following transactions (withdrawal) but excluding (state unauthorized transactions). This access is granted from (start date) to (end-date). Please find details of the authorized person below; Third party’s name ID details of the third party Phone number and email of the third party Sincerely yours, Your Name Signature
Sam Marcus 18 Industry Inc. 123 456 7890 [email protected] 2 September 2023 Dew Bank Plc Macintosh Inc. 23 Andrew Squ. RE: Authorization Letter Dear Manager, My name is Sam Marcus, and I am writing this letter to grant James Fallon access to my account 123456789. My identification number is 098765432, and a copy of my identification number has been attached to this letter. I authorize James Fallon to have withdrawal access from today, 2 September 2023, till 2 October 2023. After which, all access is to be revoked. Please let me know if you have any questions or inquiries. Kind Regards, Sam Marcus
Dear Manager, I, Sam Michael, give full authority to Maxwell Hope to handle my account and act on my behalf about transactions under 1234567 with Oaks bank. I give full access for the withdrawal but exclude all other access. This access is granted from 2 September 2023 to 2 November 2023. Please find details of the authorized person below; Third party’s name: Maxwell Hope ID details of the third party: 987654321 Phone number and email of the third party: 123 456 7890, [email protected] Sincerely yours, Your Name Signature
Conclusion
Before writing a bank authorization letter, you must contact your bank before anything else. This is important as it would help you understand what to do and what not to do.
