Joint bank accounts

Considering a current account with your other half? Learn all you need to know about joint bank accounts first.

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Opening a bank account with someone else is not for the faint hearted. It may not be as romantic as a ring, but it’s still a pretty big commitment.

We look at how it works, how to pick the best one for you and what could happen if things were to go wrong. After that, you’ll hopefully be ready to take the plunge.

What’s a joint bank account?

A joint bank account is a current account held my more than one person at the same time. The limit is usually two, although there are some banks that allow more people to open an account together.

There are multiple reasons for opening a joint account, but basically, it can be a good idea when you already share some kind of money commitment with someone else: for example, if you have to pay the rent, the bills or a mortgage together.

A joint bank account works just like a regular current account. Standard features include: a debit card, online and app-based banking, direct debits, standing orders and an overdraft facility.

How to open a joint bank account

These days, most banks allow you to apply for a joint current account online. Both of you will need to provide your personal details and to have your identity verified. Depending on the bank you’re applying with and whether or not you’re also requesting an overdraft, you may also have to go through a credit check.

In some cases, once you’ve completed the application form, you may be asked to pop in a branch and provide a proof of identity and a proof of address. That’s usually when the bank is unable to verify your identity online.

The functioning of a joint account is governed by a document (generally referred to as “mandate”) that details who can do what with the account. Both account holders will have to sign it.

Once the account is open, you’ll be able to register for online banking, download the app and fund the account. You should also receive your debit card and PIN within a few days.

Risks of a joint bank account

The reason why sharing a current account is such a big commitment is that both people have the same right to accessing the money in it. As a consequence, once you fund the account, you’re relinquishing control over your money to share it with another person. Doing this entails two sets of risks:

  • The other person may not stick to their end of the agreement and spend the money for themselves. You really need to trust the person you’re opening a joint account with. They’ll be able to spend the money how they wish; if they used it for something you hadn’t agreed on, you wouldn’t be able to get it back. Things get even trickier if your account has an overdraft facility, because both account holders are liable for the debt, even if the money was spent by one of them without the other person’s consent.
  • Your credit score could be impacted. A joint account creates a financial association between two people, so if the other person’s credit score dramatically worsens, yours could take a hit too.

For these reasons, you should only open a joint account with someone who you trust completely and with whom you share a similar money management style. It’s also a good idea to have a conversation at the very beginning on how much you’re going to pay into the account and what you’re going to use the money for.

Pros and cons

Pros

  • Makes it easier to split payments (for example, for the bills or the rent).
  • Helps with budgeting and saving – you can both commit to pay a portion of your salary into the account and then use it for, say, a holiday.
  • You can see the full picture of your finances, all in the same place.

Cons

  • You really need to trust the person you’re opening the account with.
  • If the other person has bad credit, your credit score may be impacted too.

How to close a joint bank account

What happens if you break up as a couple, or if you move out and don’t need an account with your flatmate anymore? Well, as long as you both agree on this, there’s nothing to worry about. You can split the money left into account, move it back to your individual current accounts and then close the joint account.

In order to do so, you’ll usually need to visit a branch together and bring your debit card and a proof of identity.

If you disagree on how to split the money instead, what you can do is get in touch with the bank to cancel the mandate. The bank will then freeze the account until all the parties involved reach a satisfying agreement.

Frequently asked questions

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