Joint Bank Accounts

Whether it's a shared savings nest-egg with your significant other or a temporary communal kitty between flatmates, opening a joint bank account represents an enormous decision which requires careful forethought from all parties.

The advantages

For some, a joint account is simply the natural extension of long-term co-habitation between devoted and mutually trusting partners. In the absence of marriage or children, shared finances may even be regarded as the ultimate gresture of commitment.

The tangible benefits are probably slightly less obvious, but should not go unmentioned.

Pooling your separate income streams into a single combined lot can make hefty payment schedules (mortgages, loan reimbursements, and so forth) easier to fulfill.

If you are preparing for some signficant future outlay — be it a wedding, holiday or imminent parenthood — joint accounts may also help to reduce the temptation of frivolous spending and ensure you stay on target, while also allowing your savings to profit from a more rewarding interest rate.

Household bills and grocery expenses are made straight-forward within those traditional family dynamics in which responsibilites are divided between a primary bread-winner and a stay-at-home parent who presides over domestic duties.

Joint accounts may even offer a modicum of security for younger couples in the absence of any formal life insurance or will arrangements, ensuring the surviving party is not left with impending debt summonses and no acccess to their partner's savings in the event of a sudden death.

You can both get a card or just one of you, you can both pay money in or just one of you. There are many options to work as good as for couples or just housemates sharing their bills and rent. 

Most banks offer overdraft on such joint accounts so you will be able to benefit from it but beware of the EAR as it can get as high as 39.9%. 

The risk

Of course, there is no shortage of first-hand testimony online to remind us that the importance of trust cannot be overstated — particularly when the legal recourse for recovering lost money is so shrouded in ambiguity.

Putting your hard-earned money in the control of another person means taking a significant risk, leaving yourself open to the possibility of becoming the unfortunate victim of their imprudence, or even outright deception.

Inevitably, there is a tight-rope to be walked between intimacy and space, and so too between synergy and personal freedom, and you should strongly consider which you value before taking the plunge — particularly if you have concerns about your partner being paranoid and overbearing.

A joint account can indeed function as a capable safeguard against destructive secrets, but may also find use as an instrument of control for an invasive or even abusive significant other.

While there is no prescribed period of co-habitation to observe before launching into such an arrangement, a joint account (particularly where it is in lieu of a personal one) is of course more suitable for long-term life partners than newly consummated couples still in the midst of the proverbial honeymoon period.

Who to bank with

For every horror story — and their lessons should not go unheeded — there are of course many more successful ones which slip under the radar.

If you are convinced a joint account is for you, then the main factor to consider when deciding which bank to use is the interest rate (overdraft stipulations are less important with the cushion of two incomes).

Santander's current account therefore comes highly recommended, offering an enticing 3.00% interest on balances up to £20,000. The minimum £1,000 per month deposit threshold should pose no problem for two people.

When it comes to savings accounts, meanwhile, Halifax boast a five-year term with a fixed rate of 2.15% — but it is not without caveats: funds must be deposited within the first 60 days, and early withdrawals result in a year-long suspension of interest payments.

The more flexible three-year terms offered both by Barclays and Nationwide may be more suitable for those less sure of their medium-term financial situation, though the rate of interest is slightly lower at only 2.00%.

You may want to read about: Current Account Switch