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Joint Accounts: Pros and Cons for Couples

Sharing financial accounts can make it easier for you and your partner to co-manage finances, but you’ll also share financial consequences if something goes wrong. Learn the pros and cons before you decide if a joint account is right for you.

Lora Shinn
Contributor
Published Feb 26, 2024 in: Budgeting

Read time: 8 minutes

Life-changing events like moving in together, getting married or planning a vacation often prompt couples to consider combining their finances.

It turns out opening an account together might be good for their relationship. According to 2023 research by Kellogg University, newlywed couples with joint accounts were more likely to enjoy a preserved relationship quality versus declining quality over time.

But — much like a joint home or auto loan — mismanagement of joint financial accounts can lead to account closure, prevent you from getting an individual account in the future and damage your credit if a negative account goes to collections.

Big Picture: Joint Checking and Savings Accounts

Joint account owners have immediate and complete access to all the account's funds, no matter who deposited the money.

Joint account ownership and rules can differ depending on state law and the credit union or bank's policies.

While joint accounts can help you pool resources, these accounts also make both account holders responsible for mismanagement.

How Joint Accounts Work

Joint accounts typically have one or more owners who can deposit or withdraw money. They work the same whether you're a married couple, unmarried couple, two friends or parent and child.

Depending on your financial institution's policies, both account owners can typically:

View balances.
Deposit money.
Order and use a debit card.
Stop payment on a check.
Transfer money to an individual account.
Spend money from the account.

Joint account management depends on state law and your account agreement. In general, one account owner can withdraw funds as they wish or close the joint account, according to the Consumer Financial Protection Bureau.

In addition, while it's not the case at BECU, some financial institutions don't allow a spouse to remove a partner from a joint account without the partner's consent. Each credit union or bank may have its own account rules, so it's essential to ask questions before signing up for a shared account.

Pros of Joint Accounts

Joint checking and savings accounts offer many advantages. Consider these benefits.

Improved Transparency

Having joint accounts for everyday banking can provide transparency in your daily financial life. Both account owners can see account activity and help manage money.

Pooled Funds for Joint Expenses

A joint account can function as a pool for paying joint expenses.

You can both use a debit card tied to a joint account for gas and groceries. Automatic or online payments can deduct rent, mortgage, utilities and other bills from your joint account. If you file taxes jointly as a married couple, you can pay taxes or receive refunds in one account.

If your financial institution offers rewards, deals and discounts or special rates, you could enjoy some of those benefits together.

You might find that spending decisions are more likely to be discussed openly and based on shared priorities.

On the right is an illustration of a large circle with a spinner in the middle. Inside the circle are icons showcasing different household bills: a home in a green circle, a trash can in a yellow circle, a grocery bag in a blue circle, tools in a gray circle, a phone in an orange circle and a car in a gray circle. Next to the circles on the left are a man and a woman, holding a baby. — Joint accounts can help partners merge finances and prepare for shared expenses like housing, groceries and phone plans.

A woman in a green shirt and a man in a red hoodie are standing across from each other with a table in the middle. They are each placing a dollar bill inside an envelope in the center of the table. The envelope has a bill inside. — If you both contribute to an interest-bearing account, your balance can grow faster than if you were saving on your own.

Shared Savings

You can save using an interest-earning shared savings account or set up an extra joint savings account for big-ticket items like a car, vacation or home.

If you both contribute to an interest-bearing account, your balance can grow faster than if you were saving money on your own.

You can also save together using a joint money market account or a certificate of deposit.

Rights of Survivorship

When you have a joint account with someone who dies, the funds are distributed according to state law where the account is located and how you set up your account.

Typically, the other account holder can access joint funds immediately to pay bills without going through the legal process of probate if you choose "right of survivorship" as the ownership type.

More Insurance Coverage

Use NCUA's insurance estimator for credit unions and FDIC's insurance calculator for banks to determine how much insurance you could qualify for. Depending on the number of joint owners, beneficiaries and account setup, you could qualify for more than the standard $250,000 in NCUA or FDIC insurance for an individual account. This money ensures the safety of your funds if an institution fails.

Cons of Joint Accounts

Before you sign up for a joint account with your spouse or partner, consider these possible downsides.

Potential for Financial Conflict

While transparent saving and spending might seem great, it might also lead to arguments if partners don't agree on priorities, budgets and other factors related to daily spending. Money is a common cause of arguments for couples.

Shared Financial Consequences

In a worst-case scenario, sharing a bank account can lead to financial and legal issues for both partners. For starters, either partner can withdraw the entire account's funds anytime.

To address this or any dispute about funds, you must work with an attorney and resolve the matter in court. Financial institutions cannot resolve disputes between two account holders about a joint account.

For example, if Partner A writes a bad check and overdraws the account or incurs fees, Partner B is equally responsible for paying the account fees and resolving overdrafts.

A negative joint account that goes unpaid may be turned over to a collection agency, which will likely be reported to the three credit bureaus (Experian, Equifax and TransUnion). Your credit score could drop, with information remaining on your credit report for up to seven years.

Finally, your consumer reporting agency ChexSystems score could drop due to your partner's actions with your joint account. This can make it harder for both of you to get an account in the future.

Debt Confiscation

If your partner owes money, funds could be taken from your joint account (garnishment) to repay that debt. For example, if your partner owes back child support, funds could be taken out of your joint account to repay the debt, even if you're the only person who contributed money in the past month.

Possible Limited Access

At some financial institutions, joint account holders may not have the same access or ability to make account changes. This can create a power imbalance, particularly if you're still responsible for the other person's debts and spending.

Expert Tip: Consider Joint and Individual Accounts

"I once worked with a couple where one person was a spender, and the other was a saver," said BECU Lead Financial Educator Stacey Black. "For this reason, I suggested keeping separate checking accounts but maintaining one joint checking account solely for paying bills."

Black pointed out another benefit of separate spending accounts: "If you want to buy a surprise birthday present, it'll stay a surprise."

Some couples ultimately choose to keep separate accounts to feel financially independent. Each partner can decide how and where to spend and save their own money.

On the other hand, remember that any joint account connected to an individual account could potentially withdraw funds from that account, if the joint account is negative.

Example: Jon and Jerri have an account together. Each also has an individual account. Jon spends $10,000 from the joint account to pay a tax bill, but only $5,000 was in the joint account. The institution could take $5,000 out of Jerri's individual account to repay the difference.

Discuss Each Other's Needs

A joint account can be a useful tool if managed well and understood by both people. Do your homework to understand how joint accounts work at the institution you're applying to. Make sure you understand the potential worst-case scenario — even if it's not romantic to consider.

Talking to your partner about money can lead to conversations on possible emotional effects of having a joint account. One partner may feel concerned about the possible risks, particularly if a spouse is in debt or doesn't keep track of spending. Another partner might feel unsettled without a joint account in place.

Set Ground Rules

Consider setting ground rules for your joint account. A few examples of joint account agreements between partners:

One designated partner will manage the checkbook, account statements and transactions.
One designated partner will pay the bills you're splitting.
An agreed-upon amount will be automatically deposited monthly by each spouse or partner.
All bills will be paid on time.

Purchases over a certain dollar amount must be discussed in advance.
Partners will inform each other before writing a check from the joint account.
The savings account must be maintained at an agreed upon minimum without dipping into it.
Only agreed upon joint expenses — not spontaneous purchases — can be made from the joint account, according to your shared budget.
Expenses to be paid from the joint account will be discussed as part of your shared budget conversation at the beginning of each month.

Opening a Joint Account

Discuss the benefits and limits of the financial institution's joint account. Policies may differ by financial institution.

Before you open an account, financial institutions run a report on both partners. This is a "soft pull" of your credit and doesn't affect your credit score.

If your partner has a low score with ChexSystems, you may not be able to open a joint account with your partner. Reasons for a low score could include:

An unpaid negative account balance from unpaid fees or an overdraft.
Suspected fraud.
A prior joint account with someone who had the problems above.
Old or outdated information.

If you receive an "Adverse Action" notice, you can contact the reporting agency and dispute any information reported in error. Mistakes and errors can happen — for example, a closure from more than five to seven years ago, or if someone fraudulently opened an account in your name. These shouldn't appear on your report.

FAQs

Can unmarried couples have a joint checking or savings account?

Yes, you can usually open a joint account with anyone if you both are approved by the financial institution. You do not have to be married or related to the other person. However, remember that a joint account can come with potential problems. These include being financially and legally responsible for the other person's spending and any potential debts the other person creates using the joint account.

Can I get two debit cards with a joint account?

Usually, yes, but this may depend on your financial institution. You typically can each have a debit card with unique numbers. The decision whether the joint account holder will also have a debit card is made when you first sign up for the joint account.

What is ChexSystems?

ChexSystems collects and reports information about bank accounts, including applications, openings and reasons for account closure. It documents mishandled checking and savings accounts and shares that information with member financial institutions. ChexSystems generally keeps information on file for five years.