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How to Open a Joint Bank Account: 5 Things to Consider

Milana Budisavljevic, PBO Manager , First Republic Bank
October 22, 2021

When you’re ready to make a significant financial leap with a loved one or partner, one subject that often enters the conversation is opening a joint bank account. Joint bank accounts give you and another person the ability to deposit and withdraw money from a shared account. This makes it easier to manage household finances, keep an eye on your finances and access cash when you need it. 

There’s a lot to consider when you open a joint bank account. Whether you’re looking to open one as a couple or as friends, there are a few essential factors to think about.

What’s a joint bank account?

A joint bank account is a checking or savings account opened by two or more people—be they family, couples, or spouses. They can also be opened by other entities including clubs and associations. Many couples will open joint checking and savings accounts, rather than just single accounts. 

There are several differences between a joint checking account and a joint savings account:

Joint Checking Account

Joint Savings Account

  • Designed for frequent transactions

  • Commonly used to make transactions like paying bills

  • May earn interest depending on the checking account type

 

  • Ideal for fewer transactions (some savings accounts may have monthly limits) 

  • Typically comes with monthly interest rates on your account balance

  • Designed to help savers grow their funds

 

Couples typically open joint bank accounts when they’re ready to combine their finances and share financial responsibilities. Parents also often open a joint bank account with their children in order to help them enhance their financial literacy.

5 key considerations for opening a joint bank account

There are several questions to consider before you decide to open a joint bank account with other people. All parties need to be certain that the others are trustworthy and in good financial standing before taking the leap, among other considerations. 

1. Combined financial picture

Joint bank accounts make it easier for couples or family members to share financial responsibilities. When combining finances, there are many different pros and cons to consider, depending on your own specific scenario.

Joint bank accounts provide a full financial picture by organizing finances (like income and expenditures) in one place. For example, a joint account can make it easy to determine the financial feasibility of making a large purchase.

You can see if you have enough money to make a large or small purchase, but it is harder to tell how much one contributes or withdraws from the account on an individual level.

2. Financial privacy

When you open a joint bank account, you forfeit some amount of personal privacy about how you manage your money. The other account holder can see the withdrawals, as well as where these transactions are coming from on joint accounts. 

If you and the person you’re opening the new account with have a shared sense of trust, this may not pose an issue. If, on the other hand, you’re concerned about giving up your own financial autonomy, a joint bank account may pose some problems. In these cases, you can always opt to keep a separate, individual account open for the money you do not want the other party to access. In fact, many opt to keep their own personal accounts that they use to fund a joint account for this very reason. That will be covered more later.

3. Shared responsibility

When you open a joint bank account, you’re sharing financial responsibilities on a very real level. Both you and your partner on the account have responsibilities to one another in a financial sense: the money in your account is shared and can be used to pay for a variety of shared expenses. This can help strengthen trust between the two parties, but it may also lead to you taking responsibility for any unpaid debts incurred by the other account holder.

The shared responsibilities that come from joint bank accounts are significant—your financial health is no longer just your own responsibility; rather, you’re responsible for the other party to a certain extent, just as they are to you.

4. Shared account control

Joint bank accounts can be accessed by both parties. This means either person can make withdrawals, deposits or changes to the account. This can be helpful in terms of sharing responsibilities between two parties, but it can also pose a challenge if one of the two partners on the account does something potentially harmful.

For example, if one person is unable to put funds into the account, the other can make up the difference. But, on the other hand, one party can also withdraw the entire account—typically without needing approval from the other party. 

5. Multiple accounts

Some people opt to pool all of their cash into a joint account with another person, but many others opt to continue keeping their own separate accounts as well. There are many good reasons to consider doing the latter. 

Pooling funds into a joint account to pay for shared expenses or to contribute to shared savings goals keeps the rest of your money as your own. This way, you won’t have to give up all of your financial autonomy, nor will you have to worry about ceding complete control of your personal finances to someone else.

Keeping multiple accounts can be a good idea for adults who have shared expenses, but it's also sound advice for parents who want to open an account with their children. You’ll be able to keep an eye on how your child is spending while also adding to the account when necessary.

How to open a joint bank account

Opening a joint bank account is similar to opening an individual bank account: in fact, their processes are almost identical. Most bank account applications come with the option to include a co-applicant. You can simply check the box for a co-applicant and fill out their information to have them included in the account application and, if accepted, have them sign on as an additional account holder. 

What do you need to open a joint bank account?

The requirements for opening a joint bank account are similar to those you’d encounter when opening an individual account—except you and your co-signer both need to provide them. Most accounts will ask you for some combination of the following:

●  Social Security number

●  Birthdate

●  Mailing address

●  Photo ID

●  Information for how you plan to fund your account

●  Information for how you plan to use your account

If you do decide to open a joint bank account, be sure that you and the other account owner have the same financial goals for the account, while also understanding its purpose. Miscommunication here can prove costly. Knowing what the account is for, how it will be funded and who will be managing which transactions to and from the joint account can help provide clarity when using the account. As long as you can communicate effectively, your joint bank account can ease bill paying and expense sharing. 

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