Being part of a couple inevitably means sharing financial decisions with someone else, from who will pick up the check after dinner to how you’ll split the rent.
For couples who share household expenses, having a joint bank account can make some of those financial decisions easier. According to several studies, pooling your resources into a shared account can also increase relationship satisfaction for couples who have been together for at least a year.
However, every couple is different, and only about 40% of couples fully merge their finances, according to a study from Zeta. If your partner’s spending habits are too dissimilar from yours or they have money problems, opening a joint account could invite financial trouble.
Can an unmarried couple open a joint bank account?
Joint bank accounts are available for couples, whether married or not, as long as both people are approved to open an account by the financial institution. You can open a shared account by applying for a joint checking or savings account together, or you might be able to add a co-owner to your individual account.
Your joint account will generally work like any other checking or savings account, except that it will have two owners, and both of you will have full use of its features. Each owner on a joint account can do the following:
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View the account balance
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Obtain a debit card
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Make purchases and deposits
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Transfer money to an external account
Pros and cons of sharing a joint bank account with a significant other
Pooling your finances into a single account can make it easier to split household bills and accomplish shared financial goals. Plus, it’s even been proven to increase couples’ sense of partnership and chances of staying together.
But creating a joint account also exposes you to new financial risks. Your partner can make transactions you don’t consent to, from impulse purchases to emptying out the funds. In rare cases, they can even remove you as an account owner without your knowledge.
You could also wind up paying for your partner’s money mismanagement, from overdraft fees to having funds seized for their IRS debt or back child support. If the account is closed due to misuse, your ChexSystems report (which carries information about your banking history) could be negatively impacted for five years, making it difficult to open another bank account.
Is a joint bank account a good idea for couples?
Joint bank accounts are best for couples who’ve been together for a year or more and have shared expenses, but only if both people manage their finances responsibly. If your spending habits are similar to your partner’s, you’re more likely to benefit from joining funds.
A few other details that might impact your decision to create a joint account:
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Each person legally owns half of the funds in the account.
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Deposits are FDIC-insured up to $500,000 when there are two account owners.
Alternatives to joint bank accounts for couples
If you’re not quite ready to pool all of your money into a shared account, consider an alternative, whether as a stepping stone or for good:
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Linked accounts: You can maintain your own accounts but link them together. Doing so won’t give your partner access to your funds but allows them to view your account activity and can make it easier to transfer money between two accounts at the same bank.
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Hybrid approach: With this common solution, you keep separate accounts but also have one joint account that you use for shared expenses.
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Shared money management apps: Use a budgeting app built for couples, like Honeydue, which lets you link multiple bank accounts and split expenses, but you can choose which information your partner views.
Important considerations before opening a joint bank account as a couple
The decision to open a joint bank account is a big relationship milestone and it deserves careful thought. Instead of rushing in, address these topics first:
Are both of you financially reliable?
There’s a chance one or both of you need to do some financial house-cleaning before you join your finances. Review your credit reports and financial statements together to see if you’re truly ready to take responsibility for your partner’s financial challenges.
What happens if you break up?
As uncomfortable as it is to discuss, establish guidelines for what you’ll do in the event of a breakup. That includes determining how the account funds and remaining expenses will be split up before you close your bank account.
How will you split your budget?
Decide beforehand how you’ll divvy up your shared expenses. For household bills, designate who will manage each one. Discuss your expectations for the amounts you’ll each deposit and which personal expenses that should or shouldn’t come out of the account.
When will you discuss money?
Set a time to review your finances together each month. As scary as money conversations may seem, multiple studies show that having regularly scheduled discussions can improve a couple’s financial well-being. Setting a regular time for these talks can help ensure that financial mistakes don’t go unnoticed and that you keep track of your progress toward shared goals.