Joint Bank Account Guide: How To Share Your Money, Plus Pros and Cons

What Is a Joint Bank Account?

Joint bank accounts give you a way to manage money together with another person. Both people have full control over the account: each can deposit, withdraw, or transfer money as they see fit. Legally, each person has an equal right to the money in the joint account. So each can write checks or spend the money in the joint account. One person could even close the account if they choose.

Married people often find joint bank accounts convenient, because it allows them to pool their money and make decisions as a couple, but plenty of other people use joint accounts as well. Parents and children, business partners and unmarried couples also find it useful to join their funds in one bank account. 

But joint accounts aren’t best for everyone. It takes a lot of trust and transparency to join your money with someone else’s. So it’s good to understand how these accounts work and what the rules are before switching bank accounts.

Pros of Joint Bank Accounts

Joint bank accounts can simplify your financial life and help you budget more efficiently. Below are some of the advantages of joint bank accounts.

• Equal access to funds: When you share a bank account with someone, you each have the right and the ability to access the funds. That can make it easier for family members to help each other with their finances, for example.
• See the big picture together: Joint access means you both can see the big picture when it comes to your finances: how much is coming in, where it is going and what’s left over. This can help you both plan better for the future.
• Added convenience: With joint ownership of an account, you don’t have to wait for the other party to perform a transaction. Make deposits, pay bills, transfer money without missing a due date and share the responsibility for managing your finances.
• Strengthen your relationship: A study published in the Journal of Consumer Research suggested that newly married couples who pooled all their money together into joint accounts showed greater harmony and less relationship decline during the early period of marriage. The same wasn’t true for couples who also maintained separate accounts.

Cons of Joint Bank Accounts

Joint bank accounts can be risky, depending on who shares the account with you, and you may not feel comfortable trading your independence for a team effort.  

• Requires trust and cooperation: Giving another person full access to your money requires a high level of trust. Legally, the other person on the account could spend every last cent, so you have to have a certain level of comfort in their decision-making.
• Loss of independence: Sharing a bank account with someone else can affect your independence. You’re no longer the only person with rights to that money, and you must consider the other party when making decisions about how to spend or save it.
• Loss of privacy: Joint accounts can make it tough to maintain privacy around your finances and spending habits. And you may not enjoy having your partner or family member see every transaction you make. Perhaps they judge you for your repeated coffee runs or saw a transaction that ruins a birthday surprise. 

How Does a Joint Bank Account Work?

A joint bank account works much like any other type of savings or checking account but with one big difference: you’re not the only one who can access it. 

When you share a joint bank account, each person is named on the account and has a legal right to manage it. You can deposit money into the checking or savings account, write a check, withdraw funds at an ATM, make a purchase with a debit card, or transfer money to another account. So can the joint account holder. If the joint account holder deposits $1,000 in the account, you can see that transaction and spend that money. Everyone on the account is responsible for making sure the account isn’t overdrawn and will be liable for any fees that are charged.

When two or more people share a joint bank account, each co-owner is insured for up to $250,000 with the Federal Deposit Insurance Corporation (FDIC). So if you have a joint bank account with a partner and something happens to your funds at the bank, you could be covered up to $500,000.

Joint accounts can include:

• Checking accounts
• Savings accounts
• Credit cards
• Money market accounts
• Certificates of deposit 
• Car loans
• Lines of credit (such as a home equity line of credit, or HELOC)
• Mortgages

Many people who share joint accounts also maintain individual accounts. It can make it easier to share expenses and align on goals while still maintaining the freedom to spend as you see fit. 

Who Is a Joint Bank Account Best For?

Joint bank accounts are best for people who trust each other. Couples often use joint accounts, whether they’re married or not, especially if they live together and share expenses. 

Since children can’t open their own bank accounts, checking and savings accounts for kids are typically held jointly with their parents. Aging parents, for their part, may find it convenient to have a joint account with an adult child who can help pay for their care or living expenses. 

And business partners, nonprofit organizations and community groups also may appreciate a joint account that gives more than one person access to (and oversight of) the organization’s funds.

How To Open a Joint Bank Account

To open a joint bank account with another person (or more than one person), you’ll each need proof of identification. Depending on the bank, you may be able to open the account online, or you may be required to visit a branch in person. 

Choose the best type of account to meet both of your needs, then see what information the bank requires to open a new account.

Here are the steps you can expect to take.

Fill Out the Application

For brick-and-mortar banks, visit your local branch and let them know you’d like to open a joint bank account. They’ll provide you with an application form for you both to fill out. For online accounts, you may need to submit the application electronically, by mail or by fax.

Include the Other Person as Co-Applicant

One of you will be the primary applicant, meaning you’ll enter your information first; the other will be the joint applicant. Depending on the account, this role might also be called co-owner or co-borrower.

Provide Personal Information for Each Applicant

Typically, each person who will be named on the account will need to provide:

• Name
• Social Security number
• Birth date
• Home address
• Identification (such as a passport or driver’s license)

Fund the Account

When your account has been approved, the final step is to fund it. You can transfer funds from another account, deposit cash or a check, or have another bank wire the money. When the deposit has cleared, your new joint account is ready for use.