Joint savings accounts

Are you living with your partner and sick of having to pay joint bills with separate bank accounts? Do you both have the same goals for your money? Can you be pretty confident your partner isn’t going to wake up in Vegas with no shoes, a new tattoo and a credit card bill as long as their arm?

If you answered yes to all these questions, a joint savings account may just be the answer you’re looking for.

What is a joint savings account?

A joint savings account is a savings account that two people can deposit into and withdraw money from. These accounts can be opened long-term, say for married couples pooling their finances, or short term, if two people are saving together for a short term goal.

While a joint savings account can be a super convenient way of accessing shared funds and reaching shared goals, there are also drawbacks, and you should always be careful and consider all the angles before you go ahead. Read on for more information so you can make an informed decision.

Types of joint savings accounts

There are two kinds of joint savings account which can affect how you access your money. Your decision between them may depend on who you’re opening the account with.

Both people must sign

To make a transaction through this account, both parties involved must sign their approval. This option might afford you a little more peace of mind, and is a good option if you’d like to be able to keep an eye on the shared money. It’s popular with business ventures, or could be useful for situations like flatmates paying rent together. 

The drawback is that this makes accessing the money more time consuming and difficult. For example, if one person is away, the other won’t be able to withdraw funds in an emergency. But if you’re saving up for a goal and don’t plan on withdrawing money until the goal is reached, this might actually help to keep your savings on track.

Either person can sign

For situations where you feel a little more comfortable with freely sharing the funds - for example between married couples - you can opt for an account where either person can withdraw funds at any time, without the permission or knowledge of the other.

It’s a more flexible option, but should really be reserved for people you trust wholeheartedly, because they’re within their rights to take money out, and if they rack up a bunch of fees, then you’re both responsible for paying them.

Who should use a joint savings account?

Basically, you should only open a joint savings account with people you trust. This could include your parents, siblings, partner, or business partners, among others. Opening a joint account with someone you barely know - say, the guy working at your local corner shop - is probably not a good idea. Even opening an account with a friend or a relatively new romantic partner can be iffy, because money tends to be a subject that creates friction within relationships.

So, if you find yourself considering a joint bank account, first, ask yourself:

At the risk of sounding a bit like Dr. Phil, trust is key. When you open a joint savings account, make sure you’re on the same page as the other person about how you spend, save and what the money is going towards.

Pros and Cons of a joint savings account

There are good things and bad things about pooling your money with someone, even if you’ve decided you trust them not to blow the budget on shark themed novelties. So check out the table below for all the pros and cons that aren’t so much about who you’re sharing the account with, but having a joint savings account itself.

Pros	Cons
Pooling your funds makes saving towards goals together or sharing expenses much simpler.	There’s less sense of separate money - this can be nice, but it can also lead to problems if one person feels they’re getting a stiff deal.
You won’t be paying two lots of bank fees.	If one person misuses the account - incurs overdraw or dishonor fees, for instance - then you’re both responsible for it.
Transparency - you can each see and keep track of what the other is spending and how much they’re contributing.	Transparency. Both a boon and a potential problem, this means that your spending habits are laid out bare - you’ll lose a considerable amount of financial privacy.
Pooling your money means a higher account balance, which means you’ll earn more interest. Plus, having two people using the account might make it easier to fulfill requirements - like minimum deposits - for bonus rates.	Although it’s not pleasant to think about, you should consider what will happen if the relationship breaks down. A joint account means the money legally belongs to both of you equally - no matter who put it in there. So, in the case of divorce, for example, whoever gets to the bank first might walk away with all the shared money.

Tips for using a joint savings account effectively

Budget

Having a budget for the money in your joint savings account is all about making sure everyone knows where they stand. It can involve making decisions about how much each person will contribute each month, how much is spent on essential bills and expenses, and how much is reserved for spending money.

Jump onto our budget calculator to hash it all out - the clearer your budget, the less likely you are to wind up having problems later on.

Communicate

Hand in hand with budgeting is communication. If you’re going to take the plunge and open a joint account, it’s important that you can talk to the other person about any issues that might come up. That might include:

• Who will be in charge of paying joint bills?
• Are there parts of your finances that need to be kept separate?
• Do either of you have commitments that the other is not responsible for (e.g. child support or loans from the past)?
• What will you do in the case that you can no longer keep the account together?

It might be uncomfortable at first, but getting these things out in the open is important to make sure everyone is happy with the situation.

Set goals

Part of your budget should be a plan to put away savings each month, and a goal that those savings are going toward. This will keep you on track with your saving, and can also make it easier to allocate parts of your budget. For example, if you’re saving up for a home loan deposit, you may want to allocate any leftover money to that, instead of spending it on takeout or shopping sprees.

Having a goal can also be useful to keep you united in money matters, especially if one of you has more of an inclination to spending. For people who aren’t used to sharing money, it can feel a bit dictatorial to have another person looking over their shoulder - setting a joint goal can help make it feel like a team effort, rather than snooping in each other’s business.

Find a joint savings account

So, is a joint savings account for you? Check out our savings account comparison table to find the best place to stash your cash.