If you handle your money with another person, such as a spouse or a partner, a joint bank account can make your life easier and less stressful. A shared savings or checking account provides numerous everyday banking benefits. These benefits can be even better if you choose an online bank to open your joint bank account. However, before opening a joint bank account, there are some factors that should be taken into consideration so the process runs smoothly, and you achieve the goal of sharing your finances with someone.
In this article, you will learn the basics about joint bank accounts, the benefits of opening one with an online bank, and how to do it. By the end, you will also have access to a list of the best joint bank accounts online in 2021.
A joint account works the same way as a regular bank account, except that it is owned by two or more people. With a joint bank account, you can combine your funds together. This type of account can be beneficial for both saving and spending. For saving, a joint bank account can be great if you and someone else wish to save for a common goal. When it comes to spending, a joint bank account can facilitate the payments you and your partner or flatmate might share.
A checking Joint bank account will usually provide two debit cards and, if available, two checkbooks. As co-owners of a joint bank account, both account holders will be able to access and withdraw funds without the other’s permission. Both will be able to talk to the bank about the account without the consent of the other. Thus, make sure you have a trustful relationship with the person you choose to open the account with.
A joint bank account can be helpful in many ways. Even though it is usually more popular between couples, it can also be used if you have the same goal with a friend or share home expenditures with a flatmate.
As explained, a joint bank account can be used for both savings and spending. In the case of savings, a joint bank account can be the perfect solution to save money together for a common objective, such as a house or a trip. Then, for spending, a joint bank account can improve the financial relationship you and your partner or flatmate have when it comes to shared expenses. By using a joint account, home expenditures such as rent, vehicle bills, utilities, and groceries, can all be done from the same account. This will make your life easier, while also separating the shared bills situation from your personal relationship with the other person.
If you are a couple that shares your savings and income, a joint bank account can also create a more transparent dynamic. Withdrawing cash, writing checks, and making online payments from the same account helps to keep track of how much money is being spent by both of you. This might assist you in creating a budget as a pair. With account activity accessible to both parties of the couple, there may be less of a desire to overspend or make covert transactions.
Opening a joint account can also allow you to take advantage of services that you might not have access to with an individual account. Pooling your funds may enable you to satisfy the minimum balance criteria that qualify you for benefits such as reduced maintenance fees, a higher interest rate, or prizes. Thus, pooling your funds may be advantageous for both parties.
Some other situations in which a joint bank account can come in hand are:
There are definitely other scenarios in which joint bank accounts can be useful and facilitate your life. Thus, considering opening one if you find yourself in some of these situations can be a wise idea.
Nowadays, a large share of online banks offers options of joint bank accounts. Opening your joint account with an online bank has its many perks. Of course, there are some downsides to choosing an online bank to open your joint account. You probably won’t have access to face-to-face customer service and there will be no physical branches. However, that is usually it, which might not even be an issue for you. When it comes to opening a joint bank account with an online bank or other financial institution, you will see there are many advantages that come with it and justify the decision:
Online banks usually have a higher annual percentage yield if compared to traditional banks. This is because they spend less on staff and branch operations. Thus, if you are opening a joint account with a digital bank, you will have access to better interest rates.
While most traditional banks charge maintenance fees, digital banks usually charge lower to no fees from their customers. On top of that, most digital banks don’t require a minimum balance. This way, there will be no to very low financial challenges to opening a joint account with someone at an online bank.
Traditional banks’ apps and websites are frequently harder to navigate. That is because online banking technology is not their primary operation. But when it comes to online banks, it is their only operation and the only place where customers interact with the business. Thus, digital banks spend a lot of time and capital optimizing these platforms. The result is easy-to-navigate apps and websites.
If you are convinced and wish to go this route, setting up a joint account is quite similar to opening an individual account. The process might vary depending on the bank you choose to go with. For online banks, the whole process can usually be made through your computer, tablet, or mobile.
There are two main ways to open a joint bank account. You can either open a new account together from scratch, or you can add one partner to an existing account of the other. Regardless, both you and the other person that will be an account holder will be required to provide identification and information. This identification step will demand both account applicants to send personal information such as email address, name, address, and phone number, as well as Social Security number and date of birth. Some banks might request further information.
You should consider a few things.
Some couples prefer to keep their separate accounts because they are more comfortable with this financial setting. Maintaining your own accounts allows each person to have complete control over the money they make. If couples have diverse spending patterns, this can be beneficial. Being able to handle money in one's own manner provides each individual a stronger sense of financial ownership.
If you and your partner are in different financial situations, having separate accounts might be a good way to handle it. If one spouse, for example, has a lot of debt or has mishandled money in the past, a degree of separation might provide the other person a sense of security. This doesn’t need to be kept more than the parties feel comfortable to, but it can help separate finances and relationships.
The problem with separate accounts is that it's difficult to keep track of joint spending. Trying to figure out who pays for what may be stressful for couples. If you decide to have separate accounts, you and your spouse should discuss the situation and make sure you're both OK with the arrangement.
Now that you know all the basics of joint bank accounts online, it is time to look for the ideal online financial institution in which you will open your shared account. You might prefer to go with an online bank or online credit union. However, nowadays, there are other alternatives that can also offer great banking services.
Thus, these are the best joint bank accounts online in 2021: