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Joint bank accounts let you to share financial responsibilities with another person. Compare joint account fees and features to find an option you can all be happy with.

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Mark Bristow

Updated on

02 May, 2024

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A joint bank account is an account that can be used by multiple people as equal holders.

Usually, the joint bank account is held by two people, but sometimes more than two people may opt for this type of account.

Who would use a joint bank account?

Joint bank accounts are most commonly chosen by couples because it makes it easier to manage payments with a shared responsibility – for example, childcare payments or grocery bills.

Business partners and family members, however, can also benefit from having joint bank accounts, especially if they have shared financial responsibilities. Joint bank accounts provide one simple transaction point for all parties to co-manage their finances.

In this instance, joint bank accounts can, for example, be used by business partners for work purposes and by family members who may have equal responsibility of managing an investment or property or even simple family expenses.

Benefits of joint bank accounts

There are several reasons why many couples or groups may choose to have a joint bank account. These include:

Fewer fees attached to holding one account
Easier to keep track of a couple or family’s spending habits and to determine their shared financial position
Shared payments, such as mortgage repayments and bills, can be withdrawn directly from the joint account, rather than transferring money between the parties
Budgets can be more easily established and maintained if all key financial incomings and outgoings are kept in one central account
Allows the couple or group to collectively save towards future goals such as taking a holiday or buying a property

Issues to consider before setting up a joint bank account

As relationships progress to a more serious or permanent status, some couples might consider joint bank account as a way to better manage their finances.

However, formalising your relationship by introducing the shared financial responsibility of a joint bank account requires an immense level of trust, and can positively or negatively highlight differences between attitudes to money and commitment within a partnership.

It means you and your partner will each know how much the other earns, how much money you spend and what sorts of items you spend on, along with all your other financial habits.

And while some people enjoy knowing they are equally taking responsibility with their finances, others prefer to keep their finances privately held and maintained.

If you are considering setting up a joint bank account, you can alleviate future issues by ensuring honest and open communication about how the account will be managed and what each person’s expectations are of the other.

A compromise for some couples is to have their own individual bank accounts as well as their joint bank account where they each deposit equal amounts of money in the joint account to meet their shared financial obligations.

Setting up a joint bank account

To establish a joint bank account, each party needs to be 18 years of age or older and each provide one or more forms of identification to the financial institution.

You will then need to decide what type of joint bank account is best for you, based on two main options:

Each party to sign – This type of account only allows transactions to be made when each party in the group or couple signs. This way, one person cannot access the money without the other’s agreement, so if you’re worried about security, this may be a good solution.
Either party to sign – This account allows each party to make transactions independently. This is a less secure option, because one person can withdraw and use the money without the approval of the other.

Credit cards can also be issued with a joint bank account. Any couple or group looking at this option should spend some time discussing how the account will be used.

Closing a joint bank account

If your relationship or partnership changes or completely breaks down, and it’s clear a joint bank account is no longer viable, you can’t just walk away from the financial arrangement you have together.

There is a process to follow in closing the joint bank account.

How to close a joint bank account

Agreement of both account holders to close the account: If you can do this as soon as possible, it will help avoid any delays when it comes to arranging the closure. If you can’t agree, let your bank know and they may be able to freeze or put a temporary stop on your account until it can be resolved, or they may require both of you to authorise transactions on the account. If this happens, make sure you have another active account to use for your salary and to pay bills.
Do an audit of all direct debits and credits within the account: Ask your bank for a summary of all direct credits and direct debits from the past year. Contact your employer and anyone else who regularly puts money into your account and advise them of your new account details.
Cancel all direct debit transactions: Make sure to also advise the source of those direct debit arrangements of your new account details.
Achieve a zero balance: This is necessary so you can close the account. You will need to also pay off any overdrawn amount, so you may need to divide this with the joint account holders.
Call your bank: Formally advise your bank that you would like to close the joint account. Obtain an email confirmation of the phone request, after which they will need to verify each owners' identities in order to finalise the closure. Follow up your call with a letter of confirmation including your joint bank account details, both signatures, and details of the phone call. Ask for written confirmation that the account has been closed. A letter or final statement should always be provided to you; if not, call again until you receive it and then hold onto it for future reference if any issues arise.

Mark Bristow

Personal Finance Editor

Mark Bristow is RateCity's Home & Personal Finances Editor, and an experienced analyst, researcher, and producer. Focused primarily on Australian mortgage and home loan expertise, he has been a journalist and writer in the financial space for over ten years, previously researching and writing commercial real estate at CoreLogic. In the years since, Mark has worked for the Winning Group, Expedia, and has seen articles published at Lifehacker and Business Insider.

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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