6 Apr

Risks and Benefits of Creating a Joint Account

Posted at 13:16h

Joint accounts can make it easier to manage shared expenses, but sharing access to your money can be risky.

BENEFITS

A shared account will make it easier to pay shared expenses which are common in households with two income earners.

Having one account rather than two means you are paying fewer fees to the bank. Joint accounts allow each holder to oversee the money available, which is helpful for households who delegate responsibilities across individuals.

A joint account can best be utilised for shared bills. For example, while you and your partner may have separate savings accounts, one account dedicated for shared bills will make payments easier and consistent.

RISKS

Shared access allows other account holders to withdraw money from the account.

Although some accounts require a signature from both holders, others will accept one.

Sharing an account also means that debts associated with that account are shared. One account holder could be held responsible for another holder’s debt.

There is a convenience to opening joint accounts but take this step with a trusted party and discuss how finances will be dealt with beforehand.