Mozo guides

5 must-read tips before opening a joint bank account

Couple using their joint bank account

Considering taking your relationship to the next level? Financial compatibility plays a big part in relationships, so when it comes to opening a bank account or a savings account with your partner it’s important you're on the same page.

While joint accounts can be very practical, there are risks involved that you should keep in mind.

1. What is a joint account, what type of joint account can I have?

What exactly are joint bank accounts? Simply put, they are accounts that two people can deposit into and withdraw money from. 

These can be used to manage short term shared expenses such as household bills, or to save for long-term goals like buying a car or house. Or both.

There are two kinds of joint savings accounts, each with a different way of accessing your money. 

Both to sign: To make a transaction through this account, both parties must sign. This option may offer you more peace of mind, however, if one person is away the other won’t be able to withdraw emergency funds. This is a popular choice for people going into business together or flatmates paying rent.

Either to sign: This account allows either person to withdraw funds at any time without the permission of the other person. It's a flexible option and is good for people who can share their funds freely, like a long-term couple with kids might choose to.

2. Know your partner’s financial values

When it comes to deciding whether to open up a joint account, you should both be on the same page. Know where you get your money from, how each of you value money, and what your spending history is like. 

According to Mozo’s 2018 report on Australia’s biggest financial relationship dealbreakers, four in five people said excessive spending on gambling, smoking and alcohol would be a relationship-ender. It's clear that having a conversation before you commit, could be important.

Likewise, if one of you is more money savvy than the other, you’ll need to draw up a strategy and set some boundaries to avoid financial arguments.

3. Set up a realistic budget and savings goals with your partner

It is important to identify your shared savings goals and spending habits, and then together work out a budget so you can achieve them. Opening a joint account could be a great idea if you have similar savings goals and can agree on what expenses should be shared. 

Setting up a budget is a good place to start, as is working out how much you’ll both contribute to a shared savings goal. For example, you might split it evenly or go 60/40 depending on income.

4. Risks that come with joint bank accounts

Having a joint bank account can be a great way to manage shared expenses, but there can be risks. There's a potential loss of privacy as everyone who has their name on the account can see the transaction history of all people using it.

As a type of safeguard, everyone should have their own individual bank account as well as a joint bank account. The money in your personal account could be used for discretionary or non-essential spending, not affecting the funds used to pay household bills.

Having this stash saved up can also act as an emergency savings fund. This means you can leave a relationship with enough to cover basic living costs like rent, bills and groceries while you get back on your feet.

5. Compare the best joint account rates from different banks

Once you’ve considered these tips, you’ll be almost ready to open a joint bank account. There is one last step to consider, and that’s grabbing a competitive interest rate on a savings account to maximise your savings success. 

But just how much could a different rate affect your balance? Let's take a shared savings account as an example.

Our example couple, Ben and Will, want to deposit $10,000 in a joint account, with combined monthly contributions of $500. According to Mozo’s savings goal calculator, if they were to put their deposit in an account with an interest rate of 0.50% p.a., after five years they would have a balance of $38,207. If they had an account getting 1.25% p.a., they would end up with $39,455 after the same period. 

Looking to open joint account for everyday shared spending? Head to Mozo's bank account comparison page, or check out some of the options below.

Olivia Gee
Olivia Gee
Money writer

Olivia has two years experience as a finance journalist, working across insurance, property and banking.

Maria Gil
Maria Gil
Money writer

Maria has five years of journalism experience and is currently a finance journalist covering home loans and property, personal finance and the currency exchange market. She has also completed her ASIC RG146 (Tier 2).