Joint current accounts – what to consider

The joint account – the ultimate test of who you trust or a foolish endeavour that’ll always end in tears, tantrums and abandoned debts? It’s all very melodramatic, but joint accounts are a serious business – on the one hand they’re practical and efficient, on the other… well, let’s just say nothing gets messier than when money’s involved. And if that’s not scared you off – then let’s find out more about joint accounts.

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What are the benefits of a joint account?

If you share a house with your partner, spouse, or housemates then having a ‘house’ or joint account is undeniably useful; after all, why use a number of accounts when one will do? Having one account to pay for household expenses such as bills, food, rent or mortgage means you can keep track of what your outgoings are and budget more easily. There’s no more faffing around transferring money back and forth to ‘keep it even’ and there’s no need for a kitty for necessities like biscuits, teabags and milk (that inevitably one person never contributes to).

Plus, if you all agree to put in a percentage or set amount of your wages then you can still keep some for yourself in your own current account meaning there shouldn’t be any arguing over who puts how much in and you can avoid all those messy ‘it’s not fair’ conversations.

And if there’s any money left in the account at the end of the month then – hurrah – time for takeaway and a few lemonades to celebrate your frugalness. Or, you could be sensible and save it or put it towards something worthy like your mortgage (boring but ever so responsible).

…and the pitfalls?

Anything that involves sharing money needs trust and, depending on the situation (such as whether you’re living in a shared house or with a partner), there’ll be differing levels of it. Frankly, if you’re living with your husband, wife or partner, and you share a loo and toothpaste, you should probably know whether you can trust them or not.

Joint accounts mean that someone else will have access to your money, and if their salary goes into the account, then you’ll also be able to see how much your joint account holder earns and vice versa.

But it’s not just lack of financial privacy, you’re binding yourself to another person who may or may not share your monetary nous and any black marks earned against your joint account or joint credit will reflect badly on you too.

And the most obvious pitfall – the other person could simply withdraw all your cash and run off into the sunset. 

Joint accounts – who manages what?

It’s up to you and your fellow account holder to decide who does what. What you agree, will be set out in what’s known as a ‘joint account mandate’ and it’ll make clear whether only one of you or all of you can withdraw cash, sign cheques or close the account. The mandate itself can be cancelled or amended but again you can agree whether only one of you controls this or all of you.

When it comes to debts – you’re all responsible. So if something happens and you end up splitting up or a housemate storms off in a huff leaving a hole in your account, then you (and any other account holders) will be responsible for clearing up the mess left behind.

You can set up a joint account like any other current account – some banks might let you do this online, others will need you to go into a branch and set it up in person. You’ll need proof of who you are and your address.

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What happens if we start arguing over the joint account?

If your relationship with the other joint account holder(s) breaks down, then it’s important you cancel the joint account mandate as soon as possible. This essentially freezes the account so that no one can run off with all the money. You’ll need to decide how you split what’s left in the account and if you can’t then sadly, the courts will decide for you.

This is where the law gets involved and it’s different depending on which side of the borders you live. In England and Wales, if you’re married to the other joint account holder, the account holders are all assumed to have an equal right to the money in there – no matter how much an individual put in. So if you put in £250 a month and your spouse £500 then you each have a right to all of it even though you put in less.

If you aren’t married and don’t put in money to the joint account (but have access to it) you don’t necessarily have an automatic right to the money in the account unless it can be proven that the account was intended for both of you to use. This is the same in Scotland, so whoever put the money in, ‘owns’ it unless it can be shown that the account was for both parties to use.

Comparing current accounts

Searching for the best current account is the same whether you want a joint one or one just for you. You’ll need to compare the AER (which is your interest rate), any benefits and consider whether you need an overdraft and if so, how much you need. The only difference is that with a joint account, you’ll both need to agree on what’s important. So choice is key and at comparethemarket.com, we can give you that in abundance, so let’s start comparing.

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