Managing share house rent and bills with joint bank accounts

Share house finances can make for some truly awkward territory, no matter how close the people you’re sharing with are.

One way which might help to nip any money-related tension between you and your housemates in the bud is a joint bank account.

Joint bank accounts are essentially an account that more than one person has access to. This could be the account you and your housemates use to split expenses, for instance. 

How do joint bank accounts work for share house expenses? 

Joint accounts work by giving multiple people access to a single bank account. In some cases you can set it up so that transactions need all parties to sign off or approve them. In other cases, only one account holder needs to approve a transaction. 

A joint account for share house bill splitting and paying rent could make it easier to share expenses and manage your combined money, but it isn’t risk-free. 

Whoever has access to the joint account has access to the whole pot – so make sure you trust that whoever you’re sharing it with won’t mismanage your money.

Benefits of joint bank accounts for flatmates and share houses

Joint bank accounts can be good for share houses because they may:

• Make it simpler to pay for shared bills and rent from a single account
• Spread the cost of account fees across each account holder
• Let all account holders view any transactions made using the account.

Downsides of joint bank accounts for flatmates and share houses

Joint bank accounts can carry some extra risks, such as:

• Shared money being accessible by any of the account holders (although, you can set-up a failsafe requiring approval of all the account holders, in some cases)

Who owns a joint account?

All account holders of a joint account own the money that’s in there.

Do joint accounts have an ATM card?

Yes, most joint bank accounts come with a debit card. You may even be able to get multiple debit cards for each account holder, although it’s worth checking with the bank account provider if that’s possible before you make your mind up.

In some cases, you can open a joint bank account online. However, different financial institutions may have different requirements depending on how many people will be named as account holders on a joint bank account. 

For example, if you are opening a joint bank account with one other person (two people total) then you might be able to open it online. But, if you are opening a joint account with three, four, or even five people, then you might have to go into a branch and open it in-person.

Requirements of opening a joint account

If you’re not already an existing customer of a bank, then each of you will need to have some ID, as well as other documents, in order to open the account in your joint names. These might include:

• Driver’s licence
• Medicare card
• Passport
• Birth certificate.

How to close a joint bank account

Here’s a brief overview of the joint account closing process:

1. Agree with other account holders to close it
2. Divvy up all the remaining funds between account holders
3. Pay off overdrawn funds
4. Call your bank and ask them to close the account, while all account holders are present and identifiable 
5. Get confirmation that your account is closed. 

To close a joint account, you’ll all need to agree to close it. Next, you’ll have to clear all funds in the account by dividing it amongst all account holders, including paying any overdrawn funds back. Then, you’ll want to call up the bank and ask them to close the account. 

All account holders will need to be present for the account closure and have the relevant ID they used when setting up the account in the first place. Once that’s done, make sure it’s closed by asking the bank to confirm its closure. They may send you a notice that confirms this.

It’s also a good idea to get a record of all direct debits and credits from the past 12 months before the account is completely closed, so that you can work out if you need to make other arrangements for direct debits (like rent or the house Netflix account) and credits.

Plenty of banks offer joint accounts on their everyday transaction accounts, but the number of account holders, fees, and extra benefits will differ from provider to provider. It’s always important to read the product disclosure statement (PDS) when you’re doing your own research, as that’s where the details are.

Some joint accounts can be opened online, and others you will need to visit a branch in-person with all account holders present. More often than not, if you are opening a joint account with more than two people, you’ll all have to visit a branch to set it up.

If you want to check out some of the joint bank accounts that are available at the moment, here’s a few which might pique your interest:

Provided you trust your housemates or partner not to mismanage your joint account funds, it could be a useful way to track, schedule, and pay for shared expenses like rent and utilities.

With ATM withdrawal limits and the ability to set-up your joint account with failsafes like the need for each account holder to sign off or approve a transaction, there’s some added security available in case something goes wrong.

That’s not to stoke distrust, it’s just important to remember that each account holder can affect the credit scores of all involved, should they bring the account into debt with overdrawn funds or credits.

If you don’t think joint accounts are the right thing for you and your housemates, you might want to check out these five online tools and apps every Aussie living in a sharehouse needs.

Don’t forget to compare other everyday transaction accounts before you make up your mind, or check out this year’s winners of the Mozo Experts Choice Bank Accounts and Savings Awards for 2022.