Best Joint Bank Accounts to Open With Your Partner
Unsure if sharing an account with your partner is the right choice or what’s the best joint bank account? We’ve got the answers.
November 30, 2021
Whether you’ve married the person you want to spend the rest of your life with or recently moved in with a partner, you might have decided it’s time to streamline your finances. But what’s the best joint bank account to open, and how should you navigate the process?
There are various types of joint accounts to choose from, and each has its nuances. To help you make the right choice, we’ve outlined what you need to know about joint accounts and the pros and cons of each account type — along with some advice about whether a joint account is even the right choice for you.
What’s the difference between joint and individual accounts?
On a surface level, the difference between a joint and individual bank account is pretty straightforward: Instead of one person being the owner, there are two joint account holders. They’re most common among spouses, but there are no restrictions on who can open one — it could be friends, family members or business partners.
Once the money is in the account, it belongs to both the account holders, who can spend or make withdrawals however they wish. Both parties are equally responsible for any charges they incur (like monthly account fees).
Your partner will also have access to all transaction records and statements, meaning they can see exactly how the other person is spending their money.
Because there are two account holders, there are duplicates of many things, such as debit cards and checkbooks.
Finally, the way the account balance is insured is slightly different. Whereas an individual has FDIC protection up to $250,000 (meaning you’ll get the money back if the bank goes down), this goes up to $500,000 for a joint account since both parties have an allowance.
Why open a joint account?
You might be hesitant to open a joint account if you’ve heard horror stories about people losing control of their finances due to a partner taking everything or people being left unable to make purchases independently. But having a joint account doesn’t mean any of this has to happen — as long as you also have your own account.
Many couples opt to have a joint account in addition to their individual accounts.
Joint accounts often get used for covering expenses such as:
Rent or mortgage payments
Payments for a leased car
Other shared expenses
They can also help save toward joint financial goals, like a:
Having everything in one account is far easier to manage than both people saving separately and trying to work out who owes the other one and for what.
In some cases, couples agree to deposit a portion of their paychecks into the joint account each month, ensuring they can cover their expenses. But the way you decide to run your account is up to you.
Another potential benefit of a joint account is that the combined finances of two people will likely be more healthy than an individual’s finances, meaning you could access benefits that require certain minimum deposits (e.g., waived fees).
Plus, a joint account makes it easier to access funds you might struggle to access if your partner gets hurt or passes away.
However, even if you’ve chosen the best joint bank account, opening one isn’t the right move for everyone.
Is a joint bank account right for you?
One disadvantage of even the best joint bank accounts is that they can lead to complications. A good level of trust is undoubtedly a prerequisite to this type of account.
If you’re more diligent about deposits into the joint bank account than your partner, it could lead to tensions and bitterness. It’s also possible that your partner could withdraw everything on a whim one day, leaving you vulnerable.
A joint bank account is a great start for handling your personal finances as a couple, but it’s far from the only thing you need to think about. When you marry someone, you might not be automatically liable for any debt they accumulated before they married you — but you could be responsible for what they take on after marrying you.
Also, in some cases, creditors might take money from a joint account.
Plus, even if you don’t have to pay the debt yourself directly, your spouse’s debt will still affect you. To avoid a rocky road, make sure you have a solid conversation about money before your wedding or before you decide to open an account together — and take action on any debt as soon as possible.
How do you open a joint bank account?
The process of opening a joint bank account is similar to opening an individual account, except that you’ll have to give all the information twice (once for each of you). There’s no requirement to be married, even to open the best joint bank accounts.
Both applicants will need to enter in their personal information, including their:
Social security number
Date of birth
Then, you’ll usually have to provide proof of your identity, such as a driver’s license.
Sometimes this process takes place solely online, and in other cases, you’ll have to go in — this depends on the type of institution (i.e., online versus physical bank).
What to consider
We’ve gone over the basic process of opening an account, but that’s not everything. You’ll also want to look out for certain features to ensure you can compare accounts and open the right one for you.
Some aspects to consider include:
Is it FDIC insured?
Charges — including monthly fees, ATM fees, monthly maintenance fees and overdraft fees.
Interest — what APY does it offer?
Minimum balance requirements — how much money do you have to keep in the account?
Any additional perks, such as cashback rewards or mobile apps.
The best joint bank accounts types
So, think a joint bank account could be right for you? The next thing you might notice is that there are a few different types of joint bank accounts available, and the one you should open depends on your goals. To open the best joint bank account for you, weigh each carefully.
Joint checking account
If you plan to use your joint account mostly for day-to-day expenses like bills and groceries, it makes sense to opt for a checking account. It’s a convenient option that will give you debit cards, and checking accounts often have low or no fees.
However, a disadvantage is they usually don’t offer high interest.
Joint savings account
People open a joint account to work toward their joint savings goals like an emergency fund or vacation. A savings account could be the best joint bank account type in this scenario since it maximizes returns. High-yield accounts are particularly desirable.
The best online banks usually offer higher interest rates than brick and mortar banks, but don’t assume this without inquiring.
But savings accounts don’t generally offer debit cards and may place restrictions on your withdrawals, which can be problematic.
Joint money market account
Looking for a go-between? A money market account is a kind of bank account you can open with a credit union or traditional financial institution. They usually offer higher interest than checking accounts, but unlike most savings accounts, they give the account holders debit cards.
However, money market accounts sometimes come with limitations about how often you can withdraw or spend money.
Set yourself up for a financial future together
Choosing one of the best joint bank accounts on the market can be the right decision for some couples due to the convenience they offer. However, it’s not a choice that should be taken lightly.
Opening a joint account means putting 100% trust in the other account holder, so it could make your financial situation worse if you don’t practice careful money management. Marriage finances is a topic to handle with care.
In some cases, couples would be wise to turn their attention to other priorities, especially tackling debt. To help you do this, consider a tool like Tally†, a credit card pay-off app that helps with automated payment reminders, pay-off strategies and more so you can lower your interest rates and save money where possible.
†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.