Should you open a joint account?

Do you trust your partner enough to open a joint account?

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There are many benefits to opening a joint account with a partner, but some people may feel anxious or unsure about sharing details about their finances.

Some of us want to protect our wealth from our partners, while others do not want their loved ones to know what they spend.

Here, we examine the pros and cons of opening a joint account and suggest some of the best accounts for those who decide to take the plunge together.

Joint account advantages

If you live with a partner, opening a joint current account that can be used to cover household bills and other shared expenses can make life much more straightforward.

If both of you pay in a set amount - say between 10% and 40% of your salaries - each month, an account of this kind can also help to prevent arguments about money.

And in months where there is some cash left over you can decide together whether to use it to treat yourselves, keep it in the account for tougher times or transfer it into a savings account.

Our recent research found that over half (59%) of couples with a joint account felt it made managing money together easier. Of those, 47% of couples believed it was easier to track what they were spending and a third (33%) said they were able to make better decisions together.

Although there is always the risk of one person going on a spending spree with the cash both of you have paid into a joint current account, the fact that only a percentage of your income is directed into the account gives you a measure of protection.

For anyone concerned about privacy, this also means that only the spending from the joint account can be seen.

When it comes to savings, the main advantage of having a joint account is that you can both add to it at any time, meaning that the balance is likely to grow faster.

The Financial Services Compensation Scheme protection limit of £85,000 for savers is also unaffected by having a joint account as the limit is per individual saver, rather than per account.

Having a joint savings account is therefore very useful when it comes to saving up for big purchases such as an expensive holiday for two, or a new kitchen.

The same - in reverse - is true of loans, mortgages and other credit agreements: two people, with two incomes, can borrow more than one person alone.

Joint account disadvantages

As mentioned above, one of the main problems with opening a joint account of any kind with a partner is that you are - to a greater or lesser extent - giving him or her access to your money.

Our research found that of those couples who felt opening a joint account made managing money more difficult, 59% of women and 40% of men suggested their partner spent money without consulting them.

If your partner turns out to be unreliable, or the relationship turns sour, you could therefore end up losing out to someone you thought you could trust. If you think this might happen, you can ask the bank to freeze the account while you decide what to do.

Having a joint account also creates a financial association with your partner on your credit report. If your partner has a poor credit score, it may therefore be best not to open a joint account as your credit score will be negatively affected.

Also keep in mind that having an overdraft or other credit arrangement with your partner means you are jointly liable for repaying the debt. Should he or she become unable or unwilling to meet the repayments, you will be responsible for paying back the full amount owed.

Top accounts

If you are opening a joint current account to pay bills and other shared expenses, a current account offering high credit interest could be a good choice.

The TSB Classic Plus Account, for example, pays 3.00% AER (variable) on balances of up to £1,500.

You must pay in £500 or more a month and register for online banking, paperless statements and paperless correspondence.

For joint savings, meanwhile, one of the top easy access accounts is the Aldermore Easy Access Issue 11 account which pays 1.25% AER (variable) on balances of £1,000 or more. You will need to open the account with at least £1,000. 

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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