Setting up a joint bank account is a pretty simple process, and it can make combining finances a lot easier. It’s not something that should be done on a whim, though – take the time to talk through the pros and cons before deciding to go ahead.
Why should we consider a joint account?
A joint account is often the easiest way to merge your finances, as it means you can both pay into one pot of money that’s then used for shared expenses like bills and food costs.
You could use this account for all of your money and spending or, if you prefer, you could maintain separate accounts in addition to your joint account. Many couples choose to pay an agreed amount of money into their joint account while also keeping personal accounts for their ‘fun money’. This helps to keep some financial independence. But what you decide to do is entirely up to you.
What are the risks of opening a joint account?
You should only open a shared account with somebody who you know well and trust. One of the risks associated with this kind of account is the fact that you will be creating a ‘financial association’ between yourself and the other person.
This means that when banks or lenders run a credit check on you, they will also see the other person’s details. Opening an account with somebody who has a patchy credit history could negatively affect your own ability to take out credit or open new accounts. If your own credit history is weak – and particularly if you have had any issues such as bankruptcy or CCJs – it is important to share this information before going ahead.
The other risk is the fact that you will be giving another person full access to your money. You need to be sure that you can trust the other person not to drain the account, even if your relationship turns sour. Making sure you both have separate accounts as well can be one way to avoid this.
Who can I share an account with?
It’s common for people to open an account with their romantic partner, but you can actually open an account with whoever you wish. Other common uses include housemates who may use a joint account for shared living costs, or business partners. It doesn’t have to be just one person, either – many banks will now let you open account with three or even more named users.
How should we choose our new account?
Many of the same bank accounts that are available to individual customers can also be opened as joint accounts. You can use some simple criteria to choose a bank that’s right for you: look for perks such as cashback or interest, good customer service and, if applicable, a good banking app that will help you manage your money.
Once you’ve picked an account, you can follow the same process as opening a regular account, typically going through an online form. You’ll need the personal details of everybody named on the account in order to submit your application.