A joint checking account is a bank account that’s owned and shared by more than one person. This means that each account owner can add, spend, or withdraw money as well as access statements and other important documents.
A joint checking account works much like a standard checking account, and anyone named on the account can use the money. For instance, they may make purchases, initiate transfers, and deposit/withdraw money – without having to seek approval or consent from the joint owners. And since it’s a shared account, the owners are also jointly responsible for any activities in the account (e.g., charges, fees, etc.).
Because of this setup, it may be a good idea to establish some ground rules on how you and the other account owners should manage the account. Consider the following:
Everyone’s financial situation is different, so how you decide to share a joint account is up to you. The goal is to make sure you agree on the account’s purpose and each person’s role. Clear communication here is key to help minimize any misunderstandings or mismanagement of the account.
No. While joint checking accounts are common among couples who want to combine certain aspects of their finances, they can make sense in a variety of situations. Some examples include:
Having a joint account could be convenient for couples, families, or partners who want to pool their money, share expenses, and track their spending – helping to streamline their financial management. Also, in case of emergencies, you have the peace of mind in knowing your loved ones can access your shared funds.
Shared bank accounts can be a source of conflict if they’re not properly managed. As mentioned earlier, all owners listed on the account are responsible for any activities, charges, or fees incurred (e.g., bounced checks, overdrafts, etc.) – no matter who is responsible for incurring the charge or fee in the first place.
Also, since everyone listed on the account has full access to the money, misaligned expectations or disagreements over spending could lead to conflict. Money is a significant source of stress for many people, and disputes over personal finances can seriously strain a relationship. Before opening a joint bank account, you need to feel confident that the person you’re sharing the account with will manage the money as agreed.
Many banks offer joint checking accounts. If you decide that it’s right for you and your goals, do some comparative shopping to find the right bank and account. Pay attention to things like:
You’ll need to fill out an application to open an account. Depending on your financial institution, this can either be done in person or online. The bank will ask for basic information, which may include:
There may come a time when you no longer need or want a joint checking account. The process for closing a joint account varies from bank to bank. It’s a good idea to check with your financial institution as well as the account agreement for details. Generally speaking, only one owner is needed to initiate the closure.
You’ll likely be asked where you want to transfer the balance – such as to an existing savings account or perhaps a new checking account. Just be sure that all account owners are on the same page with where the funds are going.
This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this website were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.
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