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Thinking about opening a joint bank account? Whether it’s with your spouse of 30 years, a business partner or an adult child, it’s a decision that requires careful consideration.
A joint account is simply a bank account shared by two or more people, each with full access to the funds. Having a joint account can make it easier to manage shared expenses, but it’s not always the best choice for everyone.
A recent study from Fidelity found that only about half of couples say they make financial decisions together. This shows that even people who are close don’t always see eye-to-eye on money matters.
Before you merge finances with a loved one, consider these pros and cons of joint bank accounts, and whether they’re the right move for you.
Benefits of a joint bank account
Joint bank accounts can be a powerful tool for anyone looking to streamline their financial lives and work together toward common goals. Here are some of the many benefits:
It’s easier to manage bills. With a joint account, it’s simpler to pay shared expenses like your mortgage, utilities and groceries. You don’t have to figure out who owes what or transfer money between accounts. Everything comes from one place, so budgeting and bill paying are much more straightforward.
There’s greater transparency. Both of you can see every transaction, so there’s no hiding spending habits or account balances. This openness can build trust and make it easier to plan your financial future together.
You can save for shared goals. A joint savings account lets you work together to save for things like a vacation, a new car or a down payment on a house. You can both contribute money and watch your progress, which can be motivating and rewarding.
You get more insurance coverage. Joint accounts often have double the FDIC insurance limit of individual accounts. This means your money is protected up to $500,000, instead of the standard $250,000 for individual accounts.
You have emergency access. If one account holder gets sick, injured or dies, the other person can still access the money to pay bills or cover unexpected costs.
Estate planning is simpler. When one account holder dies, the other typically becomes the sole owner of the account without having to go through a lengthy legal process. This can help ensure that bills get paid and the surviving partner has access to needed funds while settling the estate.
Dig deeper: What not to do after losing a spouse or partner: A financial checklist
💡 We asked a CFP: Why would someone want a joint bank account?
I’ve been a financial planner for 25 years and the best example of how a joint account has helped many of my clients during this time is when one of the spouses passes away or becomes incapacitated.
Regardless of which spouse ‘takes care of the bills,’ if the other spouse does not have control or access to the funds when or if something happens, it is much harder to pay for medical bills or just everyday bills as well.
In my opinion, there is nothing wrong with a joint account between spouses as long as no issues exist with regard to spending habits between the two individuals.
— John Foard
Certified Financial Planner
CCO and Cofounder of Charlotte-based Crown Advisors, LLC
Drawbacks of a joint bank account
Downsides come down to potential strain if spending, saving and lifestyle habits don’t align, including:
There’s less financial privacy. With a joint account, both of you see all transactions. This transparency can create a sense of closeness, but it can also feel intrusive if you value financial independence or prefer to keep certain purchases private.
Your spending habits may clash. If one of you is a saver and the other is a spender, it can lead to arguments. A recent study found that 34% of Gen X-ers and 33% of baby boomers have kept at least one financial secret from their partner, which can create tension in the relationship.
You’re both responsible for each other’s financial decisions. If your partner has debt or makes a poor financial choice, it can affect both of you. In some cases, creditors may be able to access money in the joint account to cover one partner’s debts.
Splitting up can be more complicated. If your relationship ends, either partner could withdraw all the money from the joint account. This can be especially difficult during a separation or divorce when emotions are running high and trust may be broken.
There’s more room for financial abuse. “One thing to remember is if you open a joint account with anyone, regardless of your relation to them, they have unfettered access to those funds at all times,” says Foard. “This makes abuse and fraud so much easier — especially if the joint owner with you is not your spouse.”
Who can open a joint bank account?
Joint bank accounts aren’t just for married couples. Any two people who trust each other to share money can open one, including:
Married or unmarried couples
Domestic partners
Business partners
Parents and their children
Adult children and elderly parents
Roommates sharing household expenses
Siblings managing family finances
Friends saving for a shared goal
We asked a CFP: Should I add my adult child to my bank account?
John Foard has been a financial advisor for over 25 years and says there’s one common instance where he usually recommends against a joint account: when it’s with an adult child.
Some older retired clients want to add their adult children to their bank accounts just in case something happens to them. Almost 100% of the time it is due to wanting to have an adult child be able to pay bills for them in the unfortunate event they become ill, incapacitated or even pass away.
This is the exact opposite of what you should do. I inform my clients that all they need to do to accomplish this goal is create a power of attorney giving their adult child the authority to write checks on their behalf to satisfy any financial obligations that are needed.
And if death is a main concern as well, I inform them to add a transfer on death (TOD) beneficiary designation to their accounts, which allows the money to pass along to their desired beneficiary without passing through probate. This is a big one for our clients, as we give this council very regularly.
Additionally, if you are a non-spouse, joint owner with someone else’s account and that person gets sued for any reason at all, you are now potentially a defendant in that lawsuit if they decide to come after the funds in that account. Best-case scenario is you will only need to pay an attorney to defend yourself against the claim, but it is still an undesirable scenario regardless.
— John Foard
Certified Financial Planner
CCO and Cofounder of Charlotte-based Crown Advisors, LLC
Joint vs. separate: Can both be the best way to bank?
Many couples find that a blend of joint and separate accounts offers the best of both worlds. This “yours, mine and ours” approach creates a sense of financial harmony while maintaining your individual autonomy, especially if you have different spending habits or goals.
You could do this one of two ways:
Option 1 — You both deposit paychecks into a joint account, then transfer set amounts to personal accounts. This allows for shared expenses while giving each partner freedom with their spending money.
Option 2 — Your income goes into separate accounts, and you transfer an agreed-on amount to a joint account for shared expenses and goals. This amount could be the same if your incomes are equal, or it could be a percentage of your earnings to keep things fair.
This blended approach can work well for many relationships.
The key is open communication and agreement on how to manage shared and individual finances. If done right, the blended strategy has many benefits:
You both contribute to joint expenses.
You maintain some financial independence for personal spending.
It’s easier to budget for shared goals.
It reduces arguments about money habits.
It’s easier to surprise each other with gifts.
You have some protection from your partner’s potential money mistakes.
Is it wrong to have separate bank accounts as a couple?
No, it’s not wrong to have separate bank accounts as a married or partnered couple. Many couples successfully manage their finances this way. What matters most is that both partners agree on the arrangement and communicate openly about money. Some couples find a mix of joint and separate accounts works best because you can share expenses and still maintain some financial freedom.
Dig deeper: 5 popular budgeting strategies — and how to find the best fit for how you save
How to open a joint bank account
If you feel comfortable opening a joint bank account with someone, here’s how to proceed:
Sit down and have an open, honest talk about your money goals and spending styles. Make sure you’re both on the same page about how you’ll handle the account.
Choose a bank and account that fits both your needs. Check for low fees, solid interest rates and user-friendly features.
Gather your necessary documents, including your government-issued ID, Social Security number and home address. You’ll need these to open the account.
Sign up for the account together — either by going to the bank or applying online, if that’s easier.
Set up online banking and account alerts to help you manage the account.
Check in regularly about your shared finances. Keeping the lines of communication open is key to making your joint account work for both of you.
⚠️ What to know: It’s more than a name change
A true joint account requires both parties to apply together. Simply changing the name of your account from “John Doe” to “John and Jane Doe” doesn’t create a joint account and won’t increase your deposit insurance or grant account rights.
Dig deeper: How to find and open a high-yield savings account
How to close a joint bank account
Closing a joint account can be tricky, especially if your relationship has soured. Here’s how to handle it:
If possible, talk to your co-account holder about closing the account and dividing the money fairly.
Open separate accounts if you don’t already have them. This way, you’ll have somewhere to put your share of the cash.
Pay off any outstanding bills or pending transactions.
Contact your bank to see what their process is for closing a joint account. Some banks require both account holders to be present, while others may let one person do it alone.
Get written proof that the account is closed, just in case.
How do taxes work on a joint account?
Any interest you earn on a joint account is generally taxable, and the IRS will require you to report it as income on your return. But how you do this depends on your filing status.
If you’re married and file taxes jointly, you report all the interest earned on your joint account on your shared tax return. You don’t need to worry about who earned what portion.
If you’re married but file taxes separately, or if you have a joint account with someone you’re not married to, it’s a bit different. The bank will usually send a 1099-INT form to the person listed first on the account. In many cases, the person who receives the 1099 reports the interest on their tax return, but rules may be different depending on your state.
You only pay taxes on the interest earned, not on the money you put into the account. Talk to a tax professional or accountant if you’re unsure how to handle taxes.
Joint account holders vs. beneficiaries: What’s the difference?
Joint account holders and beneficiaries have very different rights when it comes to your bank account.
Joint account holders are people who share equal ownership of an account. For example, you and your spouse might be joint holders of your checking account. Both of you can:
If one joint holder dies, the surviving holder typically gains full ownership of the account.
Beneficiaries are individuals you designate to receive the funds in your account after you pass away. For instance, you might name your adult children as beneficiaries on your savings account.
Beneficiaries:
Have no access to the account while you’re alive
Can claim the funds after your death, usually by presenting a death certificate
Don’t need to go through probate to access the funds
Related reading: What happens to your bank account after you die?
FAQ: Banking, your balance and managing your money
Have lingering questions about the pros and cons of joint bank accounts? Explore these frequently asked questions.
Does gift tax apply to joint accounts?
It depends on your relationship with the person you share the account with. If you’re married, putting money in a joint account isn’t considered a gift for tax purposes. The money belongs to both of you.
But if you’re not married, it could trigger a gift tax if one person puts in more than the annual exclusion amount — which is $18,000 in 2024 — and the other person can take out that money.
For example, say you open a joint account with your adult child. If you deposit $20,000 and they withdraw that full amount without putting any money in themselves, it could count as a $20,000 gift from you to them. That’s $2,000 over the annual limit, so you might owe gift tax on that extra $2,000.
If you’re not sure how gift taxes might affect your joint account, talk to a tax professional.
Which bank is best for couples?
The best bank for joint accounts will have low fees, good interest rates and convenient features like online banking. Some popular options include SoFi, Capital One and Chase. Consider local credit unions too. Compare account features, minimum balance requirements and customer service ratings to find the best fit for you and your partner. Get started with our editor’s picks for best high-yield savings accounts and best banks for seniors and retirees.
Can one person take all the money out of a joint account?
Yes — legally, one person can empty a joint account and close it without the other’s permission. Each person has full access to the funds, regardless of who deposited the money. This is why trust is a huge part of joint accounts. If you’re concerned about this, try the yours-mine-ours approach or set up account alerts for large withdrawals.
How much should each spouse contribute to a joint account?
The contribution amount depends on your incomes, expenses and financial goals. Some couples contribute equally, while others contribute proportionally based on their incomes. If one partner earns $100,000 and the other makes $50,000, you both may agree to deposit 50% in a shared account for joint expenses. The key is to agree on an approach that feels fair and meets your shared financial needs.
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About our writer
Cassidy Horton is a finance writer who specializes in banking, insurance, lending and paying down debt. Her expertise has been featured in NerdWallet, Forbes Advisor, MarketWatch, CNN Underscored, USA Today, Money, The Balance and Consumer Affairs, among other top financial publications. Cassidy first became interested in personal finance after paying off $18,000 in debt in 10 months of graduation with an MBA. Today, she’s committed to empowering people to stand up and take charge of their financial futures.
Article edited by Kelly Suzan Waggoner
