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Advice on opening joint bank accounts

Opening a joint bank account could be a good idea if you have a joint mortgage or if you and your partner want to pay your combined household bills from one bank account. But if you're going to do it, what financial advice on opening joint bank accounts should you listen to?

Financially linked

Opening a joint bank account financially links you together. This could have ramifications if you partner runs up debts that can't be paid back, as you are jointly liable for any overdraft or loan debts attached to the joint bank account. Your individual credit rating will also be affected.

Current bank

If you have decided to open an account, should you open one with your existing bank? There are pros and cons to opening a joint account with your current bank. Using yours or your partner's bank should lead to quicker transfers when you pay money into the account to cover your bills, but opening a new account with your existing bank doesn't have any financial benefits and won't improve your credit rating.

New bank

Banks aren't as loyal to their customers as they once were, so you could take this as an opportunity to join another bank. Nowadays banks are trying hard to attract new customers, so there are plenty of incentives for new account holders. A new bank could also offer a better interest rate on savings or loans, so the best advice is to open joint bank accounts with a new bank.

Account holder's rights

Different joint accounts offer different rights to the two account holders, so you should check if one of the account holders can remove all of the funds with or without the other's permission. Another question to ask the bank is: what happens if the relationship ends and the account has to be closed?

Final word

The best advice on opening joint bank accounts is to understand how opening one affects your financial position if the relationship sours. If you are a married couple you are already legally linked to each other, so there's little problem in opening a joint account, but if you are not, then you should consider whether you really need one.

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