Everything you need to know about a joint savings account

Everything you need to know about a joint savings account

Sharing is caring. That said, when you have someone to share your expenses and bills, wouldn’t that be a good idea. Yes, goodbye to those tiring days of paying joint bills from separate bank accounts. The point is; a joint account is a perfect solution to meet your joint expenses and save money for the future.

What is a joint account?

A joint saving account is a type of savings account where two people can deposit into and withdraw money. A joint account can be opened on a long term or short term basis. If you are married and would love to save money for your future finances, you can choose a joint account.

Types of a joint account

There are two types of joint accounts – both people must sign in, or either person can sign. So here’s how it works.

• Both parties must sign

Under this type, both the parties of the account must sign their approval to make a transaction. One way, this account management is good to keep track of your expenses and shared money. Business enterprises and roommates use this type of account for sharing their bills. The drawback is that it is time-consuming to get access to the funds. For instance, if one partner is away or busy, the other partner won’t be able to withdraw the funds in case of an emergency.

• Either party can sign

This type of joint account is much more liberal and relaxed. Usually, married couples prefer this kind of joint account. Under this type, you can withdraw funds at any time, without the permission or consent of the other. A joint account is a flexible type of savings account to use with the person you trust wholeheartedly.

Who should use a joint savings account?

If you are planning to open a joint savings account, consider opening with your close family members or friends, whom you can trust. Opening a joint account with a person whom you barely know is like inviting risks and loss.

Strengths and weaknesses of a joint account

Benefits of having a joint account:

• Saving your funds towards achieving your goals together by sharing the expenses.
• Some banks provide zero balance saving account for opening a joint account. Bank charges will be comparatively less than managing an individual account.
• Both parties can see the track of what the other is spending and how much they are contributing.
• When two parties deposit money to the account, there will be a high account balance, which will make you eligible to get high-interest rates. Also, you don’t have to take the burden alone of putting a minimum deposit or balance.

Threats of having a joint account

• The chances of owning their own money or a sense of owning the money will be lost as the whole amount is owned and shared by two parties.
• If one person misuses the account, the other person will have to bear the loss and incur the expenses as well.
• In case of a divorce or relationship breakdown, whoever gets to the bank first might walk away with all the shared money.

Final interpretation:

As long as your goals are short term, the risk involved is less. If you are looking for sharing your room rent or such kind of minor expenses, then managing a joint account would be pretty straightforward. To be on the safe side, always have good communication with the other partner. You must talk to the other person about any issues that might come up. The best thing is you can also open zero balance account for a joint account online by mobile banking app or net banking apps.