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Joint Savings Accounts

Our guide to joint savings accounts

Victoria Russell
Written by  Victoria Russell
5 min read
Updated: 04 Mar 2024

You may be thinking about combining your savings with a partner, friend, or family member. Our guide gives you the rundown on joint savings accounts

Key takeaways

  • All named account holders of a joint account have access to the funds, anyone can deposit or withdraw money

  • Joint accounts may earn more interest due to higher balances

  • Half of the interest is allocated to each account holder and counts toward their Personal Savings Allowance, even if co-owners are in different tax brackets

  • Division of funds varies based on the relationship between co-owners

When you're planning for the future with someone else, whether it's for a wedding, a new home, or just a rainy day fund, managing your money together can be a smart move.

Joint savings accounts are a popular choice for partners and friends alike who are aiming for a common financial goal.

In this article, we'll explore what a joint savings account is, how it works, and what you need to consider before opening one.

Woman and man sitting on sofa

What are joint savings accounts?

A joint savings account is essentially a savings account that is shared by two or more individuals.

Each person named on the account has the authority to deposit and withdraw funds, making it a flexible option for managing shared savings.

It's a practical solution for those who are working towards a common financial target.

Purpose of joint savings accounts

Joint savings accounts are ideal if you’re saving towards a shared goal such as a house deposit, home improvements, wedding, or just an emergency fund.

They are designed to help co-savers pool their resources together, making it easier to reach their financial objectives.

How joint savings accounts work

When you open a joint savings account, all named account holders will have access to the funds.

This means anyone can deposit or withdraw money and keep an eye on the account's activity.

It's not uncommon for individuals to maintain their personal savings accounts while also contributing to a joint account.

Interest benefits

One of the perks of a joint savings account is the potential for earning more interest. Since the balance may be higher than what would be in individual accounts, the interest accrued can be more substantial.

However, it's important to note that half of the interest earned on a joint savings account will be given to each account holder, and then set against their individual Personal Savings Allowance.

Even if you and the account co-owner are in different tax brackets, interest will still be split evenly.

Eligibility for opening a joint savings account

In the UK, you need to be over 18 and have a permanent address to open a joint savings account.

Some banks might also require you to have a current account with them, but this isn't always the case.

The number of account holders can vary, with some providers allowing more than two.

Considerations before opening a joint savings account

Before you take the plunge, it's crucial to consider a few things:

  • Do you and your potential co-owner share a similar attitude towards money?

  • How might opening a joint account affect your relationship, especially if things don't go as planned?

Pros and cons of joint savings accounts

Pros:

  • Combined contributions can help you reach your savings goals faster

  • You might benefit from higher interest rates due to larger balances

  • There's an increased sense of accountability and focus on saving

Cons:

  • Closing the account can be difficult if both parties don't agree

  • There's a risk of one owner withdrawing funds without the other's consent

  • Joint ISAs are not an option as they must be held in individual names

Adding someone to an existing savings account

Some banks allow you to add another person to your existing savings account. This can be a convenient option, but it depends on the bank's policies and your personal circumstances.

Tax implications

The tax implications of a joint savings account are straightforward. The interest is divided equally between the account holders and counts towards their Personal Savings Allowance. This is the case regardless of whether the co-owners are in different tax brackets.

Safety of funds in joint savings accounts

When it comes to protecting your money, joint accounts are protected by the Financial Services Compensation Scheme for up to £170,000.

The FSCS assumes equal ownership of funds, so the protection applies whether one person deposited all the money or if it was split between co-owners.

Disagreements between co-owners

Disagreements can lead to complications with joint accounts. In such cases, funds can be frozen until both parties reach a resolution. This might even require court intervention, particularly after relationship breakdowns.

Legal protection across relationships

The division of funds in a joint savings account can vary based on the relationship between co-owners. Married couples typically see an equal division, while friends and family might divide based on individual contributions.

Alternatives to joint savings accounts

If a joint savings account doesn't seem right for you, consider alternatives like:

  • Combining Lifetime ISAs: If you're saving for your first home, you can combine your Lifetime ISAs for the house deposit, provided neither of you already owns property

  • Joint current accounts: These can be used for shared expenses and might offer overdraft facilities

Other useful guides

To further your savings knowledge, check out these guides:

Finding a solo savings account

While MoneySuperMarket doesn't offer joint savings accounts, we can help you find the perfect solo savings account. With options like cash ISAs, fixed-rate bonds, and easy access accounts, you can use filters to sort by interest rate, term, and deposit limits for easy comparison and application.

Frequently asked questions

What are the rules around direct debits and overdrafts for joint savings accounts?

Overdrafts are a typical feature of joint current accounts but are not available for joint savings accounts. This is because savings accounts are not designed for withdrawals.

Direct debits are not a feature of joint savings accounts either. In fact, regulations stipulate that you cannot set up a direct debit from any kind of savings account.

So if you require a shared account for paying household bills, you'll require a joint current account instead.

Will a joint savings accounts help my credit score?

Opening a joint savings account won't impact your credit history. This is down to the fact that credit reference agencies don't scrutinise savings accounts when determining your credit report.

For that reason, joint savings accounts are not a way to improve your credit score. But they won't harm it either.

That's in contrast to joint current accounts. If you open one of these with a partner, you're deemed to be linked financially. Which means that a partner's poor credit history could affect your chances of securing credit in future.

Can you use mobile and online banking with a joint savings account? 

Yes, you'll be able to manage your joint savings account online or via a mobile app, just as you would with any other savings account.

Both account-holders will be able to log into online banking with shared log in details. And just as critically, both can download the provider's app and register on separate on mobile devices, too.

 



How do you close joint savings accounts?  

When you want to close your account, the balance will be divided between all co-owners. Your provider will usually need this agreed upon in writing by all account co-owners. 

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