A joint bank account can be a convenient way of managing your finances as a couple, enabling both of you to access and manage the account.
A joint account could, for example, be used to manage shared household expenses such as utility and food bills. But they’re not for everyone, and whether this type of account is suitable for you and your partner will depend on how you want to approach your finances.
In this article, we explain what you can do with a joint bank account and some things to consider if you’re planning on opening one.
How does a joint bank account work?
A joint bank account works similarly to a standard bank account, except that two people are named as account holders and can use the account, effectively sharing a single pot of money. Both account holders can withdraw and deposit funds, make payments, set up standing orders, and so on. They can each request their own debit cards and have their own details for mobile and online banking.
A joint account doesn’t have to be a current account – you can set up a joint savings account if you’re both saving towards a specific goal together, such as a holiday. However, you cannot set up a joint Individual Savings Account (ISA).
In most cases, you don’t need your partner’s permission to make transactions with a joint account. However, this means that this type of account is only really suitable if you really trust each other with your finances. You may prefer to stick with separate accounts if you don’t feel comfortable with both of you sharing and having access to a joint account. .
Both account holders must give their approval in order for a joint account to be closed down.
How do I set up a joint bank account?
Most banks and building societies offer joint bank accounts. You can usually set one up either online or in-person, bearing in mind that you’ll both usually need to provide the necessary ID and undergo a credit check before the account is approved.
Bear in mind that some banks state that you must both be customers already before you can set up a joint account. Some banks also let you add your partner to your current account to turn it into a joint account, though they will be subject to the usual checks before being approved as an account holder.
What are the downsides of having a joint bank account?
If you are considering getting a joint bank account with a partner or anyone else, it’s important to beware of the potential pitfalls.
- Your credit histories will be linked. When you set up a joint account with someone, your credit files are essentially linked, and lenders can view your partner’s credit history when you apply for future credit. This could damage your chances of getting accepted for a loan, for example, if your partner has a poor credit score, even if your score is very good. Therefore, it’s sensible to have a frank conversation with your partner about their credit history. If they have a low credit score, you could consider some ways you might be able to improve it before taking out a joint account.
- One person can make all the decisions. As mentioned, joint accounts typically do not come with any restrictions for either account holder, meaning the person you set up the account with could potentially spend or withdraw all the money. For that reason, again, you should only set up a joint account with someone you really trust. Most couples, though, have their own current and savings accounts for their personal spending, while the joint account is used for household bills.
- Overdrafts are shared too. If either you or your partner run up an overdraft on a joint account, the other account holder will also be responsible for this.
What will happen to our joint bank account if we split up?
If you and your partner split up or are going through a particularly different period that’s affecting your ability to manage your finances, you should contact your bank straight away, either by phone or in-person.
Usually, they will offer to either freeze or close the account, or change it so that you both must approve any transactions. This will prevent either of you from making rash financial decisions or withdrawing money without each others’ agreement. You will generally both have to agree to unfreeze a joint account after it’s been frozen.
Bear in mind that procedures for managing accounts vary between banks, so it’s worth finding out your bank’s approach when you’re setting up your joint account. Find out more about what you should do in this situation in our article Joint bank accounts: what happens if you split up?
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