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

First Republic Bank
October 22, 2021

  • Joint bank accounts are like regular bank accounts but with two or more co-owners who generally have equal access to the account.
  • They’re good options for spouses, business partners or anyone who has shared financial responsibilities.
  • There are a few variations on joint bank accounts, depending on how much financial agency you and your partner want to have overlap.

When you’re ready to make a significant financial leap with a partner – whether in life or business — one subject that often enters the conversation is opening a joint bank (or credit union) account. Joint bank accounts give you and another person the ability to deposit and withdraw money from a shared account. This can make 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 married couple, significant others, business partners, friends or any other kind of partnership, there are a few essential factors to consider.

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. 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 to help them enhance their financial literacy.

Joint checking account

Joint checking accounts, like regular checking accounts, are designed for frequent transactions. They’re commonly used to make transactions like paying bills and other household expenses via debit card or writing checks. Depending on the type of checking accounts, they may also earn interest.

Joint savings account

Joint savings accounts are ideal for fewer transactions, with some accounts mandating monthly transaction limits. They typically feature monthly interest rate payments on your account balance and are designed to help savers grow their funds.

How do joint bank accounts work?

Joint bank accounts — whether checking or savings — function similarly to regular bank accounts, with the primary difference being that there are two (or sometimes more) co-owners on the account. This means that anyone who owns the account has full agency over the account and its contents, including the rights to:

  • Withdraw and deposit money into the joint account.
  • Have their own debit card or checks connected to the account.
  • See all account activity.
  • Utilize online banking (where applicable).

Whereas in regular bank accounts the Federal Deposit Insurance Corporation (FDIC) insures each account up to $250,000, each co-owner of a joint account is FDIC-insured up to $250,000. So if you and your spouse share a joint account at a member FDIC financial institution, the account itself will be insured up to $500,000: $250,000 for each of you.

It’s important to bear in mind that in standard cases, co-owners of a joint account have equal claim to the assets therein, regardless of who deposited it. For this reason, it’s paramount to share a joint account with someone you deeply trust.

Types of joint accounts

There are a few different types of joint accounts with varying parameters. Learn more about each type to see what might be the best fit for your needs.

Joint Account Type

Basic Definition

Joint Tenants with Rights of Survivorship (JTWROS)

A derivative of a standard joint account, a JTWROS account divides the assets within the account in allotted percentages to its co-owners. When a co-owner dies, their allotted assets automatically transfer to the other co-owner(s).

Joint Tenants in Common (JTIC)

Similar to a JTWROS account, a JTIC account apportions its assets in percentages to the co-owners. In this case, however, when a co-owner dies, their assets are passed on to the deceased’s estate or next of kin — not to the other co-owner(s).

Convenience Account

In this type of account, one co-owner exclusively makes all deposits and has exclusive rights to the contents of the account. The other co-owner may make withdrawals on behalf of the primary joint account holder and won’t automatically take over control of the account upon the primary owner’s death.

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 banks will ask you for some combination of the following:

  • Social Security number (SSN)
  • Date of birth
  • 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. Communicating effectively regarding your joint bank account can issues regarding ease bill paying and expense sharing responsibilities.

Pro-tip: All co-owners of the account will share one joint account number.


Joint bank account fees and requirements

As with regular bank accounts, there are a host of fees and requirements that may be associated with a given joint bank account, including:

  • Monthly fees
  • Maintenance fees
  • Overdraft fees: may result due to a lack of communication between co-owners
  • Minimum deposit requirement
  • Minimum balance requirements

How to add someone to a bank account

It’s also possible to add an additional owner to a preexisting bank account. Simply contact your financial institution and provide the same information and documentation that you would provide when opening an account.

How to close a joint bank account

Similar to closing a regular bank account, you will need to provide proof of identity upon closing your joint bank account and either withdraw or transfer all the funds out of the account.

Depending on the financial institution, you may or may not need all co-owners to fill out the appropriate paperwork, either online or in-person.

Pros and cons of joint bank accounts

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.

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.

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

Benefits of joint bank accounts

  • Joint bank accounts make it easier for couples or family members to share financial responsibilities.
  • 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.
  • If one person is unable to put funds into the account, the other can make up the difference.
  • The option of direct deposit makes it easy to maintain minimum balance requirements in a joint bank account, as well as increase its liquidity.
  • It can be a helpful solution for adult children who are taking care of their elderly parents.

Drawbacks of joint bank accounts

  • You can see if you have enough money to make a large or small purchase, but it’s harder to tell how much one contributes or withdraws from the account on an individual level.
  • 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’re concerned about giving up your financial autonomy, you can always opt to keep a separate, individual account open for the money you don’t 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.
  • The newfound, shared financial responsibility may lead to you taking responsibility for any unpaid debts incurred by the other account holder, or may cause friction if you and your co-owner have different spending habits.
  • One party can withdraw the entire account — typically without needing approval from the other party.

Final considerations

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. There are many good reasons to consider doing the latter.

Pooling funds into a joint account to pay for shared expenses and contributing 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.

However you decide to pursue joint bank accounts, make sure to speak to a financial professional first to help you select the best option for your continued financial management.

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