When working towards similar financial goals with your partner, a joint account could be the best option for you both.
A joint account can be either a bank account, a transaction account or a high interest savings account that two or more people share. These types of accounts are generally used by family members, couples or business partners who know each other quite well and trust each other. This is because anyone who is nominated on the account can use the money in the account in any way they see fit.
A joint bank account can be opened for the long-term, like an account a couple opens to have their salaries deposited into, or it can be a temporary arrangement, like an account two people open to add money to achieve a short-term goal. If one of the account holders passes away, the remaining people named on the account will be able to access the money but will also be responsible for any debts the account may have accrued.
Joint Bank Accounts Comparison
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Savings Account
Description
Monthly Account Fee
Debit Card Access
ATM Withdrawal Fee
Interest Rate p.a.
Details
ING DIRECT Orange Everyday Account
No monthly fee, get 5% back on paywave purchases under $100 and no ATM fees when you get $200 or more cash out.
$0
Yes, Visa
$0
0.00%
Withdrawal amount needs to be $200 or more to waive ATM fees
Open
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ANZ Access Advantage
Open ANZ Access Advantage everyday account and enjoy unlimited transactions using ANZ ATMs, ANZ Phone & Internet Banking, plus branch, cheque and EFTPOS .
$5
Yes, Visa
$0
0.00%
Unlimited everyday ANZ transactions for $5 a month
Open
More
Bankwest Zero Transaction Account
No monthly account fees when you deposit at least $2,000 per month (e.g. salary). Plus $0 ATM fees at all major bank ATMs Australia wide.
$0
Yes, Mastercard
$0
0.00%
Minimum deposit of $2,000 per month needed to waive ATM fees otherwise $5 monthly fee applies.
Open
More
Citibank Plus Transaction Account
Enjoy international money transfers from Australia to any account, anywhere in the world. No monthly fees, no ATM fees.
$0
Yes, Visa
$0
0.00%
No ATM fees using Citibank, Westpac, BankSA and St .George branded ATMs
Open
More
St.George SENSE
An incredible transaction account with a high interest rate!
$0
Yes, Visa
$0
3.10%
No ATM fee when using St.George / BankSA / Bank of Melbourne / Westpac ATMs (in Australia). No monthly service fee if you deposit a minimum of $2,000 per month otherwise $5 monthly fee applies.
Open
More
Bankwest Rewards Transaction Account
Earn points on your balances and every time you use your debit card. Plus no overseas ATM withdrawal fees
$0
Yes, Mastercard
$0
0.01%
No overseas ATM withdrawal fees, No monthly account fee when you deposit at least $2,000 per month.
Open
More
NAB Classic Banking
No monthly account fees ever and get a NAB Visa Debit card with payWave at no extra cost. No ATM fees at one of Australia's largest ATM networks.
$0
Yes, Visa
$0
0.01%
No minimum deposits required to get $0 monthly service fee.
Open
More
Generally, you will find that there are two types of joint accounts, namely where both parties have to sign and where either party can sign.
Both parties required to sign
This type of joint account requires both signatories to sign for the approval of a transaction. In other words, both parties need to agree on the transaction and sign for it to be performed. Often these accounts are used for business banking.
For example, if you don’t think that you need a new television, but your partner wants one, he or she cannot make the purchase without you because you need to sign as well. If you are worried about the other person’s spending habits or the trust isn’t what it should be, this is a good option to ensure you know what is happening with the money at all times.
However, you have to decide whether the added level of security is worth it. If you trust your partner implicitly, this might not be the best option because it can make the account difficult to access. For example, if you are away and your partner needs money urgently, he or she cannot make any withdrawals or payments without your signature.
If you aren’t fully comfortable with allowing the other person full access to the money, one option could be to create a joint account where you deposit a limited amount of funds, while keeping your salary account separate and in your name only.
Either parties able to sign
When opening a joint account where either party can sign, this means that any parties named on the joint account can perform transaction on their own, without the knowledge or approval of the other person. In other words, security is at a minimum because your partner can take out money and spend it without you being an agreement or even knowing about it.
On the other hand, it is a more flexible option and can make life easier. It’s all a matter of trust.
Who are joint bank accounts suitable for?
A joint bank account is only a good idea if you really trust the other person. It could be your sister, brother or a partner you have been with for a long time. Opening a joint account with someone you barely know or have just met, even if it’s your romantic partner, is probably not a good idea.
Case Study: Steve and Melissa
Steve travels a lot for work. He is a sales rep for a large manufacturer and he has to travel the country all the time. He has been with his partner Melissa for almost 5 years now and decide that it is time to make the decision to open a joint bank account together. The decide to open an ING DIRECT Orange Everyday Account online.
They both change their detail with thei payroll so they can get their salaries paid into the joint bank account. The main reason behind this is so Melissa can handle any bill payments while Steve is on the road.
They both make incidental purchases, but as Steve gets access to the money 24/7 he does not mind Melissa spending as long as all the bills are paid.
If you are in a relationship where you trust your partner implicitly and you both share similar goals and habits in terms of spending and saving, then a joint bank account might be a good idea for you. This type of account could make life much easier in terms of making deposits, withdrawing cash and paying your bills.
Should I open a joint bank account with my partner?
If you are in a long-term relationship and you trust your significant other, a joint bank account can be an excellent tool to help you manage your money. Firstly, you won’t have to pay the fees twice and, secondly, drawing up a budget and sticking to it might be easier when you both pool your money together. Furthermore, if one of you has to be away for an extended timeframe, the other person can take care of all the financial aspects.
The key to success when it comes to joint bank accounts is trust. If you have even the smallest doubt when it comes to your partner, then don’t open a joint bank account and give them full access to your money. However, if the trust is there, then a joint bank account can be quite useful. It is important that both account holders establish clear ground rules and the lines of communication are not only open but used often.
As with anything that has to do with your finances, look into any other options that might be suitable to your situation. Pose as many questions as you need to and ensure that you are happy with the arrangement before taking the final step.
How to compare joint bank accounts
The easiest way to find a joint bank account that will suit your needs is to use financial comparison sites. These sites have done all the hard work for you and will allow you to compare most of the offerings available on the market on one page.
Remember, as with any bank account, you’ll want to find a bank that offers joint bank accounts with as few fees as possible. In fact, it’s preferable to find one that won’t charge you transaction fees, that will give you easy access to your funds and that will offer a reasonably good interest rate on the funds you have in your account.
Furthermore, you don’t want to waste time opening a joint bank account because time is money, after all. Most banks will allow you to open your account online, which makes it much easier in terms of coordinating schedules so that you are both present when opening the account. The majority of banks will let you enter all the information online, saving you a lot of time.
Pros and Cons
As with any financial product, there are advantages and disadvantages to joint bank accounts. Being aware of the pros and cons when it comes to joint bank accounts is essential to ensuring you make a fully informed decision regarding whether or not this type of account is a good option for your situation.
Pros
Less fees
Full transparency
Easier to pay and schedule bills
Managed personal finance efficiency
Generally, people opt for a joint bank account because they don’t have to pay as many fees as they would have to if they had two accounts. It can also make life easier in terms of paying bills, the mortgage or rent.
Note, though, that these types of accounts are usually best suited to people who have similar spending habits. For everything to proceed smoothly, it is vital for both parties to come to an agreement regarding how and when money will be deposited and withdrawn and to ensure that both share the same goals.
Remember, though, that a joint bank account is an account where you completely merge your money with another person’s since both of your names are on the account. This means that you both have access to the other person’s money.
To take full advantage of such an account, you both should deposit all your money, from your salary to any cash you may receive as a wedding gift, into this account. The money can then be used to cover all your expenses, from paying rent or mortgage and the utilities to going out for dinner or drinks.
A joint bank account offers a high level of transparency because there is no question regarding where the money is going. Furthermore, it makes paying bills much easier. Either of the account holders can issue cheques, make withdrawals and, of course, make deposits, as long as the account is one where either of you can sign.
This can be a great solution for couples because with all the money in one place, it makes it a lot easier to manage your personal finances. And if one of you passes away, the other person can access the money immediately without having to go through any formalities.
As already mentioned, a joint bank account can make life much easier. It will make things much more efficient in terms of managing your personal finances and will also help you save money since you won’t be paying as much in fees. Just think about how annoying it would be if you both held separate bank accounts to try and pay equal shares on the utilities, rent, mortgage and so on. You’d probably need to hire an accountant just to keep track of who owes how much and on what. With a joint bank account, this is no longer an issue.
Cons
Complete access to both parties money
Division of funds in case of separation
Complete transparency
If you opt for a joint bank account where either accountholder can sign, this means that both parties have the same level of control in terms of withdrawals and deposits. In other words, either of you can make a deposit or withdraw cash without letting the other person know. Even if this occurs accidentally, it can still cause problems.
For example, let’s imagine that you knew there were $300 in the account the day before so you schedule a BPAY transaction to pay the water bill for $250. However, your partner took out $200 earlier that day without letting you know. This means the BPAY will fail and you will end up paying penalties.
Then there’s the issue of divorce or separation. In this case, a joint bank account can be a serious headache. Either of the account holders can clear out the account, regardless of who made the deposits. Yes, you can take the other person to court to recover your share of the money, but it’s a long and arduous process that offers you no guarantees that you’ll ever be able to get the money back.
Furthermore, it can cause friction because either partner could end up feeling as if they can’t spend a single dollar without informing the other person, which can lead to people feeling trapped. Some could even consider it a threat to their independence and this may lead to a lot of resentment building up over time.
Joint bank accounts have advantages but they can also lead to trouble
A leading news web site recently published an article regarding the benefits and drawbacks of joint bank accounts. According to the article, it appears that an increasing number of Australians are opting for joint bank accounts so that couples can manage their money together.
According to Roy Morgan Research, it appears that 22% of account holders have a single bank account, which is a joint bank account, while 19% also have personal accounts along with their joint account.
Mr. Brett Morgan, the executive director of ING DIRECT was quoted in the article, saying he feels that there are numerous important aspects to consider before opening a joint bank account. He says that it all depends on how people like to manage their money. If they prefer their independence and like managing their own money, then a joint account isn’t the best idea.
It’s also critical that partners are completely open regarding their spending habits, because otherwise, things won’t go well. This is because maybe one partner wants to save for something and the other spends all the money because they can’t keep their spending under control. Furthermore, some couples are hesitant to open a joint bank account because things can get complicated if they break up. In fact, things could get complicated and lead to a break up because of the joint account.
Common mistakes with joint bank accounts
It’s an enormous commitment and a very important decision to make in your relationship when it comes to opening a joint bank account. Trust is extremely important and you have to have that trust in place in terms of your partner being financially responsible during the good times as well as the bad.
You really need to be careful if someone is trying to push you into opening a joint bank account. Someone who might have money problems could see you as the answer to their prayers. Keep in mind that such pressure could involve one partner questioning the other partner in regards to their feelings for them. Things you could hear include: “don’t you trust me?”, “it means you don’t love me” or “what do you think I’m going to do? Run off with your money?” These are all a form of emotional blackmail, especially if accompanied by the cold-shoulder. In such situations, you should really refrain from opening a joint bank account because things are quite likely not to be what they seem.
This is especially true when it comes to joint bank accounts that offer credit. Your partner could rack up a huge amount of debt they can’t pay back, and then you both are stuck with a poor credit history. Furthermore, you are just as responsible in the eyes of the law for paying back the loan as is the person who actually spent the money.
So, you really need to be careful and consider every aspect before you open up a joint bank account. Make sure you are on the same wavelength with your partner in terms of your financial goals and don’t let yourself be pressured into opening a joint bank account or you could end up losing every cent you have.
What to ask yourselves before opening a joint bank account
If you are considering opening a joint bank account, there are certain questions you need to entertain. These are questions that will help you determine if you are doing the right thing or not.
Do you pool your expenses together?
In other words, do you both use the same budget and consider your costs as family expenses rather than individual expenses? If all you have joint expenses, then it is logical to have a joint bank account.
Are you both the same in terms of how you spend money?
This refers to whether you are both financially responsible or not. In other words, is one of you going to scrimp and save while the other empties the account, spending money on frivolous things so that there’s no money left to cover the bills? If this is the case, then you are better off either keeping things separate or opening a joint account where both of you have to sign for each transaction. It might make things a little more difficult but it will definitely be worth it.
Are you comfortable with the idea of opening a joint bank account?
You might save a few dollars on fees, but if you aren’t really all that happy about the idea, then don’t do it.
Is the trust there?
Trusting the other person completely in terms of them acting financially responsible, at all times, even if things get tough is essential. If the trust isn’t there, you are better off keeping things separate.
Are the lines of communication open?
You need to ask yourself if you both find it easy to talk about money issues. If there are communication problems when it comes to money and if you feel you have to hold back on saying what you want or expressing your opinion, then you are better off avoiding a joint account.
Are our financial goals the same?
You need to know that you are both working towards achieving the same goals because otherwise you will end up with both of you trying to push the cart in opposite directions, which means you will just end up standing still. Even worse, one of you might be pushing harder and you’ll end up going backwards rather than progressing.
What is the goal of opening a joint bank account?
Figure out exactly why you should open an account and see if there is a better way of achieving said objective. If you want to save money on fees, for example, consider whether the few dollars are really worth the worry. You could simply shop around to find an account with lower fees instead of opening a joint account.
Tips to make it work
While there are plenty of drawbacks to joint bank accounts, there are also significant advantages as well. So, if you want a joint bank account but are still a little worried about taking the final step or you already have a joint account, the following tips will make your life much easier:
Consider your reasons for a joint bank account
Make sure you never open an account with someone you’ve just met or have some doubts about in terms of trust. Stick to opening a joint bank account with people you knew well and trust completely, such as your mother, father or spouse.
If you have a joint account that you use for savings, paying credit cards, the mortgage or other bills, make sure that you are financially safe so that you are protecting yourself as well as your family.
If the account is for everyday use, you need to ensure that both of you have the same goals in terms of savings. You also need to establish clear rules so that both parties are in full agreement regarding what the account will be used for.
Avoiding complications with joint bank accounts
A joint bank account can make it complicated to monitor how much is being spent and where, which means that you need to talk to each other about what the money is being spent on.
If you have the slightest impression that you are being pressured into opening a joint bank account, don’t do it. Talk about it first.
If the main reason behind opening a joint bank account is convenience, take a look at the option of setting up direct debits. Not only could this solve your problem of getting your bills paid without you having to actually do anything, but it could keep your money safe and save your relationship because there won’t be resentment issues or suspicion.
Additional Cards?
Some banks will allow you to give out additional credit cards tied to your main credit card account. While not strictly a joint account, it still gives another person power over your money. So, to make sure things go smoothly:
Never give out cards to people you don’t know or trust;
Don’t give out cards if you aren’t able to manage your own credit card properly;
Keep in mind that in most cases you are the only one responsible for the loan. No matter who spends the money, you will still be the one who has to pay it back, so think twice before giving out cards attached to your credit card account.
If you aren’t too certain about opening a joint bank account and giving your partner full access to your money, an alternative that would still offer you the convenience you are looking for is to open a joint bank account that you use to pay bills while still keeping your money in separate accounts. Just have a talk with your significant other in terms of what bills the account will be used to pay and how much each person will contribute to said bills.
Communication is key
On the other hand, if you’ve decided to go ahead and open a joint bank account with your partner, make sure you talk about the important issues in advance. For example:
Will either partner have an allowance to spend on whatever they want?
How much does each party have to put towards the bills?
Are there financial aspects that need to be dealt with separately and who will be in charge of said affairs?
What about financial obligations from the past, like child support, loans or other touchy issues?
Then, you will have to decide which accounts will be set up as joint accounts and which will remain separate. For example, some couples choose to pool their savings in a joint account while their everyday accounts remain separate. Other couples opt to separate ownership of property, such as their homes, especially when said property was purchased before the relationship began.
Work out a budget
To make life easier for both of you, put together a monthly budget. The easiest way to do this is to write down all your expenditure for a week, which will allow you to see where all the money is going and if there are areas you can cut back on to save some money. Then, work out a budget. Don’t be too strict and make sure to give yourselves some ‘play’ money, which will make it much easier to stick to your budget. Also, make sure you communicate with your partner regularly, as this will increase the chances of things succeeding.
Maintain steady savings
Since things happen in life, no matter how hard we strive to avoid problems, it’s best that you make a plan for emergencies. This could be anything from unemployment or sickness to an accident or your car needing major work. The idea is that it’s essential to have some money set aside specifically for such emergencies. A personal overdraft could be useful in such situations as well as ensuring you have quite a bit of free credit balance on your credit cards. Of course, don’t forget about insurance either. Ideally, though, you should set aside some cash in a separate bank account as well.
Financial goals
You should also make sure you and your partner are on the same page in terms of savings. Establish your goals together and you will find it a lot easier to save money when you are both working towards the same objective, like a deposit on a home, a special holiday, a car or furniture.
For some couples, a joint bank account is a great option. If you decide to go with a joint bank account, you will both have to go to the bank and open the account. Note that certain banks will let you open the account online, which will make life a lot easier in terms of schedules.
How much should we deposit?
To decide how much will be deposited in the account, you can work out a fair percentage you can both put in the account every week, fortnight or month, depending on how you get paid. This percentage should generally be calculated in terms of how much each party makes as well as what the budget is and what each party’s expenses are. However, talking is the best way to come up with a way to make sure both sides are happy so that you can avoid problems, including resentment building up and cheques being bounced.
Joint bank accounts can be a good idea but only if you and your partner are on the same page when it comes to how you spend your money and what your financial goals are. If you are simply opening the account for the sake of convenience, remember that there are plenty of other options that can provide the same level of convenience without the risk.
However, if the trust is there, a joint bank account can definitely make life much easier, especially when you are working together to achieve certain financial goals.
What's next?
Further pros and cons of joint accounts
Everyday transaction accounts
What are the different types of bank accoutns
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