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Opening a Joint Bank Account: Everything You Need to Know
While planning a wedding is probably at the forefront of your mind throughout your engagement, there’s something else you should be planning for, too: your marriage. You’ve got decades of life together ahead of you, so it’s important to take a little time between the cake tastings and dress fittings to lay the groundwork for the future. More specifically, it's vital to plan your future for financial wellness.
If there’s one thing couples have a hard time discussing but really need to address together, it’s finances. "Money is rarely 50/50 and a lot of partners enter relationships with their own financial situation, whether it is student loan debt or investments that are not equal to their partner," says financial advisor Misty Lynch. From your monthly budget to savings accounts (and don’t forget college savings if you plan on having children!), money is one thing that’s never going to go away, so deciding how you and your partner will handle your finances is key. Many couples opt to combine some (or all) of their finances into joint accounts, but how do you know if it’s right for you? Below, see how to open a joint bank account and what it really means for you.
Meet the Expert
Misty Lynch is a Certified Financial Planner and the director of financial planning and financial advisor at Beck Bode.
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As co-owners of a joint account, it’s important to know that both of you will have access to withdraw funds without the other’s permission, and each of you will be able to talk to the bank about the account without the consent of the other.
The Benefits of Joint Bank Accounts
Joint accounts are a great way to give you and your partner a transparent view of how your money is being spent. By both having access to your accounts, you can save toward shared goals (like a new home or a vacation), as well as keep track of household expenses like utilities or groceries. With account activity visible to both of you, there’s less temptation to splurge because you are both on the same page.
A joint account can also help you qualify more quickly for your bank’s rewards programs. For example, growing your qualifying savings and investments in a Bank of America account can qualify you for discounted home and auto loans, $0 Merrill Edge stock and ETF trades, and credit card rewards bonuses.
The Drawbacks of Joint Accounts
Of course, combining accounts isn’t always the right answer. Keeping separate accounts can be helpful if you and your partner are in different places financially. For example, if one partner is carrying a lot of debt or has mismanaged money in the past, a degree of separation can provide a sense of security for the other person (at least until the debt is paid off).
If you decide to maintain separate accounts, be sure to clearly determine how those shared expenses will be covered, whether from a single joint account or by establishing how much you each will contribute. Determining who pays for what can be a point of stress for couples. Clarity in this instance is absolutely essential.
How to Set Up a Joint Account
If you and your partner decide to combine your finances, opening a joint account is a similar process to opening an individual account. You may also be able to add one partner to the other’s existing account instead of opening an entirely new account.
You will both need to provide information and identification. "Opening a joint bank account is a fairly simple process that you can do online through most banks," Lynch explains. "You will likely need to provide some personal, identifiable information so it will help to be together when you get this set up. With some banks, there may be verification questions to answer that even the closest couples would have trouble guessing without their partner with them."
Transfer Money to the Account
"Once the account is created, you will just need to transfer in the opening balance required to get the account funded," says Lynch. "You will both want to order your own debit cards and/or checks so you can access the account when you are not together."
Alternatively, you can also choose to add your partner to an existing account instead of opening a new one. "This will give the new joint owner full access to the account once they are added, and it could be as easy as completing a form or visiting your bank branch to get this accomplished," Lynch notes.
Alternatives to Joint Bank Accounts
Some couples will opt to keep their separate accounts but to split up expenses "the way they would with a roommate," says Lynch. "This can allow each person to maintain their own access and control over their accounts." Couples who are used to making their own financial decisions might feel more comfortable this way, Lynch explains, "Needing clearance or permission to spend money in a joint account is not for everyone."
You might consider opening a joint account but keeping your separate accounts, as well. If so, talk to your bank about linking both of your individual accounts to the joint account. Linking lets couples maintain independent control of their checking accounts while sharing a joint account from which they can pay bills, manage household expenses, contribute savings, and handle other daily financial responsibilities. This way, you have a shared space to deposit money for mutual expenses or to save for future goals.
Talk to your spouse to come up with an agreed amount you will each contribute to the joint account when you get paid, bonuses, or tax refunds. Reassess this amount periodically and as your life changes.
Another similar route is to get joint credit cards for these types of shared expenses. "They could agree on the payment strategy each month," suggests Lynch. "This may also help couples get a clear idea of what their routine spending looks like if they decide later to combine all their finances."
Are You or Your Spouse Committing “Financial Infidelity”?
Opening a joint checking or savings account with someone close to you can help you spend, save and monitor money more efficiently. Visit your local TD Bank to explore your options and open a joint bank account today.
When to open a joint bank account
Sharing a checking or savings account can be a good idea for a variety of relationships, such as married or unmarried partners; parents and children; seniors and caregivers.
A joint bank account makes it easy to:
- Pay shared bills, like rent, mortgage or utility bills
- Buy shared items, like groceries
- Create a budget and keep track of spending
- Contribute to financial goals, both big and small
- Deposit checks for each other
Plus, with two people contributing to your monthly balance, you may even be able to upgrade to an account with more features like TD Beyond Checking and TD Beyond Savings.
A joint account, also known as a dual account, is an account that has more than one owner.
Each owner has full access to the account and can:
- Make deposits and withdrawals
- See all account activity
- Have their own debit card
- Write checks—joint bank account checks will have both names on the check
- Set up their own profile in Online Banking and the TD Bank app with full access to the joint bank account
The best way to open a joint account is to book an appointment for both account owners to visit a TD Bank. A TD representative will work closely with you both to explore how a joint account might help you reach your financial goals and make everyday banking easier. Together, you can choose the checking or savings account that works for you.
To open a joint account, you'll need:
- Identification for both account owners, like a driver's license, state ID or passport
- Personal information for both account owners, including your date of birth, Social Security number and current address
- Funding your account at opening will allow you to begin enjoying the benefits immediately
Explore TD Checking and Savings accounts
When you're ready to open a joint bank account, visit a TD Bank with your co-owner to get started.
TD Checking Accounts
Talk to your co-owner about which checking account works for your budget and has the perks you want
TD Savings Accounts
Discuss your savings goals with each other and choose the account that works for you both
Open a joint bank account in person together
Whether you're opening a new account or adding someone to your TD account, both owners will need to bring the required info.
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Benefits of Joint and Separate Bank Accounts for Couples
There are several key moments in every relationship, from your first date to your wedding and your first home. And with every life event, couples are faced with a multitude of choices, like changing names and where to build a life together. One of the biggest decisions for many couples is whether or not to open joint bank accounts.
We outline the benefits of both joint and separate accounts for couples to help you decide what’s best for you:
What’s Mine is Yours: Benefits of Joint Accounts
There are several benefits to merging your finances with your partner. When your money is in one place, both partners have access to it and can pay bills or make purchases without needing to swap cash or use a mobile transfer service. It also gives you two sets of eyes on your accounts to monitor for suspicious activity or fraud.
Similarly, a joint account can give you a fast picture of your combined finances, making it easier to ensure that you have enough to pay bills and determine if you can afford date night. And because your partner can see your transactions and vice versa, that joint account may help you to curb unnecessary spending and keep your spending habits in check.
While no one wants to think of a time when their significant other will no longer be with them, it’s a very important consideration when managing finances. With joint accounts, the surviving spouse can more easily and quickly access funds without needing to go through the legal system.
Independence: Benefits of Separate Accounts
Combining assets is not for everyone, and that’s OK! If you and your partner are happy with your current arrangement of separate accounts, why fix what isn’t broken?
For some couples, the loss of independence associated with joint accounts is a major drawback and they prefer to keep their funds separate. Separate accounts also makes it easier to surprise your significant other with gifts or other presents without arousing suspicion.
If one partner makes more than the other that can create uncomfortable situations when accounts are shared because one of you may feel that you contribute more than the other. Similarly, one partner may have debts, such as student loans and credit cards, or financial obligations like child support. For some, it may feel more comfortable for those expenses to come out of a person’s individual account, rather than the joint account.
With separate accounts, the financial aspect is less messy should your relationship end. If you keep your assets separate, your ex-partner cannot withdraw any money and leave you with less cash or worse.
Best of Both Worlds
Some couples find that a balance of accounts, both joint and separate, gives them the best tools to manage their money.
Each relationship and person is different and regardless of your account status, it’s important to communicate about finances with your partner. We work with couples at all stages of their relationships and lives at Rockland Trust. Our bankers can help you and your partner determine how to best meet your financial goals and achieve the key milestones that mean the most to you.
What type of savings account is right for you?
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3 things you should know before opening a joint bank account
There are a few major moments in every relationship: moving in together, getting married, having kids.
Opening a joint bank account is not usually included in this list, but most financial experts would argue that the stakes are just as high.
In the view of finance expert Melissa Leong, it’s not a decision that should come lightly.
“If you’re going to open (a joint account), it should come with a discussion about money expectations and boundaries,” said Leong, the author of finance guide Happy Go Money.
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“When you’re in a committed relationship and you’re working toward shared financial goals, it totally makes sense to have a joint bank account,” she said.
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Having one account for recurring costs — like housing, utilities and groceries — is much more convenient than keeping a tally of who owes who what.
“It also makes it easier to understand how the two of you spend cash and to talk about your finances,” said Leong.
She believes these conversations are a crucial part of a happy and healthy relationship.
Chantal Heide of Canada’s Dating Coach agrees. In her view, the finance conversation should happen even before you live together.
“You’re setting yourself up for disappointment if your partner isn’t on the same page,” she said.
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“Put your own (thoughts) on the table and take it from there.”
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Once both you and your partner are clear about your financial goals, you should agree on a set of rules for the account.
For Heide, this means asking questions like, “Who’s taking care of what expenses? Who’s going to put how much into the account and when? How is that money going to be taken out and distributed?”
Financial expert Desirae Odjick takes this one step further.
She believes you and your partner should have several finance-related conversations before diving into a joint account.
“It’s really important to have conversations about budgeting before you talk about the logistics of how you’re going to pay for things,” said Odjick.
“If you’re nervous about it, (try) grounding it in something really concrete — like taking a vacation together. This is a great place to start.”
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Both Odjick and Leong concur — a joint bank account can be great, but it needs to be used properly.
Here are some things to consider if you and your partner are thinking about opening a joint account.
Find what works for you
The way another couple uses their joint account may not be the best model for you and your partner — and that’s OK.
In Leong’s case, each month, she and her husband automatically transfer a set amount of money out of their joint account and into their private accounts.
“This is an agreed-upon stipend strictly for personal spending and fun,” Leong said.
“This way, I don’t feel guilty about treating my best friend to a pedicure date, and he doesn’t ask why I need more shoes.”
It’s critical to keep the lines of communication open so that both you and your partner are comfortable with how your money is being used.
Don’t close your personal account
Odjick cautions against putting all of your eggs in one basket.
“Whether you’re moving in together or you’re married, things happen,” she said.
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“It’s unfortunate to talk about because it’s not what anyone wants to happen, but you always need to have an exit.”
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Odjick believes you should always have your own money, regardless of how long you have been together.
“You can be paid into your own bank account and contribute to a joint account with your partner,” she said.
“It’s a good introduction to sharing finances while not offending the financial systems you already have in place.”
The legal implications
“Just because you have equal access, it doesn’t mean you’ll both use the money fairly,” warned Leong.
“You have to trust that the other person won’t behave like a jerk with the pool of money.”
And, as Odjick points out, this can create legal issues should you and your partner break up.
“The other person has the same legal right to that money as you do,” she said.
By putting someone else’s name on the account, they can empty the account at any time.
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“That’s the level of trust that you really need to be thinking about… if you’re going into this. That money is legally both of yours,” Odjick said.
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