Keeping track of bills and rent or loan payments each month can feel like a chore. It can also put a strain on your relationship asking your partner for their contribution to bills, and you might be left wondering that there must be a better way to deal with your household finances. Thankfully there is.
Joint current accounts are a solution worth considering for partners that want to take the stress out of money matters and be easily able to control their monthly expenses with joint responsibility.
A joint account is essentially a savings account that is shared and operated by two persons. Each partner has a debit card and access to internet banking, with the ability to make payments and transfers from the account. Direct debits, standing orders and loan payments can be set up to come out of the account for various expenses shared by the partners.
While a joint current account is typically used between partners, it can also be used with a housemate, friend or a family member for different reasons. Whoever you share the account with should be someone that you can trust completely, as they’ll have access to the money that you put into the account.
What are the benefits of a joint account over a standard account?
The benefit of having a joint account is that it is an easier way to manage household expenses. Both partners can lodge a certain amount each month into the account that will cover all expenses such as rent or home loan payments, utility bills, grocery shopping and even entertainment costs. It takes the hassle out of each partner having the responsibility of paying bills themselves and then working out who owes who money each month.
With direct debits set up and each partner having a card to access the account for in-store or online purchases, there is less time and effort involved in controlling your finances.
How a joint account can be used
There are different ways that you can operate a joint account with your partner, and how you choose to do so will depend on how you both want to manage your money. Take a look at the following scenarios for two ways on to utilise a joint account.
Scenario 1
James and Felicia have been living together for one year but are not married. Both partners have their salary or wages paid into their own personal account, and they each transfer $1,000 into the joint account every month to cover their rent and utility payments. The money kept in their personal accounts is theirs to use as they please.
Scenario 2
Selina and Kyle have been married for 20 years and all of their income goes into their joint account. Every month they have direct debits and mortgage payments coming out of this account and they transfer a portion into their joint savings account. Both Selina and Kyle use their joint account for grocery shopping, entertainment and personal expenditure, as they have built a level of trust and agreement on how they spend their money together.
Types of joint accounts
Opening a joint account means having both you and your partner’s names as the account holder. You can choose to have the joint account operate either on a joint-alternate or joint-all basis.
Joint-alternate accounts
In a joint-alternate account, any one of the account holders can perform banking transactions (such as withdrawing cash, writing cheques or closing the account) on that account individually. This means that one account holder can execute any banking transactions without the knowledge or acknowledgement from the other joint holder(s).
While this type of joint account offers a lot of leeway, understand that you can be held liable for any borrowing on a joint-alternate account even if you weren’t aware of the transaction.
Joint-all accounts
Joint-all account requires all holders of the account to provide and acknowledge the instruction for the banking transaction before it can be executed. This means that whenever an account holder wishes to perform banking transactions on the account, be it withdrawing money or issuing cheques, the other account holder(s) must also authorise the transaction.
Joint and several liability accounts
If there is a “joint and several liability” clause in the terms and conditions, the bank has the option of suing both you and your joint account holder, or choose to sue either one of you only.
What are the drawbacks of having a joint account?
Most partners find that having a joint account is beneficial, however, it’s important that you work together with your partner to find the best way to manage your finances and expenses.
Because both people have access to each other’s money, establishing trust and rules about what the account can be used for is important. You may find that some banks ask you to set a limit on what can be spent from the account or that both parties will need to give consent for applying an overdraft. Both people are responsible for any fees, charges or debts that arise from the account, and your individual credit ratings could be affected based on your partners’ financial activity.
Even though having a joint account can make life much easier, it is also a responsibility that must be carefully discussed before making the commitment.
How do you compare joint accounts in Singapore?
Since a joint account is actually a savings account that is shared and operated by two persons. So to compare your options for joint accounts, you’ll need to compare the features of the savings accounts available in Singapore. Here are some key features you should take into consideration:
Fees. Maintenance and transaction fees vary across banks, so it’s important to consider how you will use your account and look for a fee structure that will compliment this. Even though a maintenance or fall-below fee may seem low, the bank may charge more for other transactions that will add up over time.
Interest rates. The interest rates offered by savings accounts are typically low, but it is still undoubtedly the most important feature to consider. Some accounts such as the DBS Multiplier account or OCBC 360 account even offer a higher interest rate when you spend in multiple categories or above a certain threshold.
Perks. Depending on how you use your account and your lifestyle, you may benefit from perks associated with your joint account such as exclusive promotions at partner merchants or cashback on purchases and bill payments.
Overdraft facility. An overdraft facility can be worthwhile having in case of unexpected bills or expenses in between paydays. Extra fees are usually charged for this, so make sure you and your partner are clear on the terms in which the overdraft can be used as you are both responsible for the debt.
Mobile payments. Some banks give you the option of linking your joint account with Google Pay, Apple Pay or Fitbit Pay.
Loan interest rates. If you are thinking about taking out a home loan to buy a home with your partner in the future, look for a joint current account that gives preferential interest rates to its existing customers. This could end up saving you money over the term of your loan compared to what another bank can offer.
Which banks offer joint accounts in Singapore?
There are many banks in Singapore that provide joint accounts. Take a look at a summary of the pros and cons of each.
Pros
Earn daily interest
Earn cashback on your DBS/POSB debit cards
No minimum initial deposit requirement
Fall-below fee waived for full-time NSFs, people below 26 or above 60 years old, public assistance recipients, or those opening their first POSB account online
Cons
A $2 fall-below fee applies to customers outside waiver if the minimum average daily balance goes below $500
Low 0.05% p.a. interest on first $350,000 of balance
Avoid fees by: Maintaining at least $500 in your account at all times.
Pros
Tiered bonus interest on top of base interest rate if you meet the required monthly transactions, up to 4.4% p.a
Low account balance eligible for bonus interest
Cons
Requires $1,000 initial deposit
Requires tracking of multiple bonus categories to maximise interest earn
A $2 fall-below fee applies after first year waiver if the minimum average daily balance goes below $3,000
Avoid fees by: Fees are only waived if you keep a minimum balance of $3,000
Pros
Straightforward savings mechanism and tiered interest system
Earn competitive interest rates when you spend $500 monthly, and credit your salary or settle at least 3 bills monthly via GIRO.
Enjoy competitive exchange rates on your overseas spend by linking Mighty FX to your One Account.
Cons
Bonus interest rate only available for account balance between $15,000 and $75,000
A $5 fall-below fee applies if the minimum average daily balance goes below $1,000
Avoid fees by: Fees are only waived if you keep a minimum balance of $1,000
Pros
High max. base rate of 0.38% p.a.
Low minimum initial deposit of $500
Interest-on-interest feature for accounts with an average daily balance of at least $5,000 over a 6-month period
Cons
A $2 fall-below fee applies if the minimum average daily balance goes below $500
The account will be automatically closed if the balance remains at $0 for 30 days
If the account is closed within 6 months of opening, a $30 early account closure fee will be imposed
Avoid fees by: Can only avoid all fees if you maintain at least $500 in the account each month
Pros
Standard Chartered Unlimited Cashback cardholders can earn up to 5% cashback with this account
No minimum initial deposit requirement
Cons
Low interest rare
No tiered interest rate structure for various spending categories
A $5 fall-below fee applies if the minimum average daily balance goes below $3,000
Avoid fees by: Can only avoid all fees if you maintain at least $3,000 in the account each month
How do I open a joint current account?
Most banks give you the option of opening a joint current account either online, mobile app, by phone or by visiting a branch, although there are one or two that will only do it in person. First, you need to make sure you are eligible and have the correct documentation.
To open an account in person, visit your closest branch along with the original copies of the required documentation:
Identification (NRIC or passport)
Proof of employment (For foreign applicants)
To open an account online, you will need to fill in an application form either on the bank’s website or through a mobile app. For most banks in Singapore, you’ll also be able to fill up your online application form via MyInfo using your SingPass ID and password. You will then need to upload photos or scanned copies of your identification and proof of address documents:
Identification (NRIC or passport)
Proof of address (utility bill or any statement from a government body)
Proof of employment (For foreign applicants)
Each bank may have slightly different requirements so this is just a guide. Make sure to check with your chosen bank about their eligibility criteria, specific account opening process and the documentation they require.
Zyane is an associate editor for Singapore at Finder. An experienced copywriter and content creator, Zyane enjoys writing on a wide array of subjects. When she’s not busy typing away, she’s reading and musing over a pint.
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