Choosing the best joint account

What is a joint account?

A joint bank account allows two or more people to access the same account, with equal rights to draw and deposit money. As you’d expect, this type of account tends to attract married couples, those in civil partnerships and couples who are living together and have shared bills. If you live in a shared house, you may be considering opening a joint account with your housemates to cover joint bills. Whoever you set up an account with, you'll need to be very clear about the potential consequences, what the money is to be used for and how the account is managed.

What are the benefits of a joint account?

When you have shared financial commitments such as rent, a mortgage, utility bills, grocery shopping and children, having a shared account can make managing those joint commitments easier. 

If as a couple you’re looking to cut back on your spending or want to work towards a particular goal such as buying a house or perhaps saving for a wedding, a joint account can provide greater financial transparency. You can see how much money you both have coming in, what essential bills you're both paying and work out a budget that’s suited to your goals and finances.

By depositing money in the same account, the Financial Services Compensations Scheme limit will be applied to both of you. This mean you're still eligible for FSCS protection up to the same limit of £120,000 per eligible person. 

What are the disadvantages of a joint account?

If you pay your money into a joint account you need to be able to rely on your partner to manage yours and their money effectively. If one of you is better at money management than the other or you disagree about each other’s spending habits, there is little you can do.

If one person takes money out of the account without the other’s knowledge, there’s no way of forcing them to pay it back. When the account goes overdrawn you're equally responsible for the associated debt. With a joint account you're not just giving someone access to your money, you’re also giving them the potential to decide how that money is spent.

This leads us to one of the most important things to consider when you open a joint account; the credit histories of you and your partner will become linked. This means that if one partner has a worse credit score than the other, it may have a negative impact on the score of the other partner. With this in mind, it’s vital to be honest about your financial situations before opening an account.

Alternatives to joint accounts

Before you open a joint account explore ways to maximise any financial advantages of having separate accounts and decide if the advantages of individual accounts outweigh the convenience of a joint bank account. Could holding separate bank accounts help you access better features such as a free fixed overdraft? Or perhaps closing the account you're currently using will mean sacrificing free phone insurance and increase your outgoings?

Take your time and explore all the options before you commit to a joint account. 

Compare joint current accounts

With most joint accounts simply being current accounts with a secondary account owner, research the best current accounts to see who real customers recommend and who they think you should avoid. Had a good or bad experience with your joint bank account? Let us know by leaving a review of your account.