Managing a joint bank account
Couples often open joint bank accounts once they begin living together, but before you go down this financial path, you need to consider both the risks and the benefits of having a joint account and make sure you understand your rights and obligations.
Our top tips for joint accounts
- If you do have a joint account for savings, mortgage, credit cards, mobile phones or other expenses, you should have financial safety in mind to protect both yourself and your family.
Only open a joint account with someone you trust completely, such as your spouse or a parent.
- If it's a joint account for every day use, make sure that you and the other person share the same savings goals. Set some clear rules so you both agree what the account is for.
- When you have a joint account, it can be difficult to keep track of what is being spent, so ensure that you communicate with each other about your spending.
- If you feel as though you are being bullied into opening a joint account, resist opening the account. Personal problems such as gambling can cause someone to steal money - even from close family and friends.
- If you're considering setting up a joint account for reasons of convenience, stop and look into the option of setting up direct debits instead.
- Use our best finance advice to decide wthether a joint account is right for you
Two signatory options
When opening a joint savings account, you may have to choose between the options of 'both to sign' or 'either to sign'.
- Both sign – this means that no transactions can take place without both of you agreeing. While this does give added security, it can also make the account difficult to access.
- Either sign – This allows either of you to make transactions independently of one another. While this does give you more flexibility, it also makes the account less secure.
Why would I want to open a joint account?
If you trust your partner, a joint account can be a good way to manage your money for the following reasons:
- You may only have to pay one set of fees
- Pooling your money together may make budgeting easier
- If one of you is away for an extended period of time, the other can manage your finances
The key to opening a joint account is to trust the other person. Joint accounts can be very useful as long as you and the other account holder have clear ground rules and communicate often. Like anything to do with your personal finances, investigate all the options, ask lots of questions and make sure you feel completely comfortable before agreeing to anything.
Is it safe to have a credit card attached to my joint account?
Some joint accounts offer credit facilities. If that's the case, there is a risk that if one account holder racks up a big debt, the other could be left to foot the bill. If you can’t pay it off, you could also end up with a bad credit history, which will make it harder, and more expensive, for you to borrow money down the track.
- Learn how to manage your own credit card before considering having a credit card attached to a joint account.
Find more information about managing your finances:
- How to deal with debt
- Insurance - protecting you and your family
- Loans, families and relationship breakdowns
- Managing your loans and mortgage
- Switching bank accounts
- Using a financial counsellor
- What to do if you lose your job
This article was created by Ella Walsh for Kidspot - New Zealand's leading parenting website. Sources include the federal government and ASIC.