What Is A Joint Bank Account? How It Works And Do You Need One

A joint bank account is a bank account that belongs to two or more people. Most of the time, it’s couples who share household expenses, parents helping adult kids or family members managing finances together.

Instead of constantly transferring money back and forth or splitting every bill, you put shared money in one account that everyone can access. Both people can deposit paychecks, pay bills and withdraw money as needed.

But it’s important to remember that once money goes into a joint account, it belongs to everyone on the account equally.

How do joint bank accounts work?

The biggest difference between a joint account and a regular account is that everyone listed on the account has complete control. There’s no “primary” owner or “secondary” user — everyone has the same power.

This means either person can write checks, use the debit card, make online transfer or walk into the bank and withdraw everything. The bank doesn’t track who deposited what or ask permission before allowing transactions.

Joint checking accounts work exactly like regular checking accounts — you get debit cards, can write checks and pay bills online. Joint savings accounts earn interest and keep your money safe, just with multiple people who can access it.

The flip side is that both people are on the hook for any problems. If one person overdraws the account, both people owe the overdraft fees. If one person gets into legal trouble, creditors might be able to go after money in the joint account.

Joint accounts vs. individual accounts: What’s different

Here’s how joint accounts stack up against accounts owned by just one person:

The trade-off is pretty clear: joint accounts give you convenience and extra insurance coverage, but you lose privacy and take on shared financial risk.

Pros and cons of joint accounts

Pros

Paying shared bills is way easier: No more splitting grocery receipts or figuring out who owes what for utilities. Everything comes out of one account that you both contribute to.

You get double the FDIC insurance: Instead of $250,000 in protection, joint accounts are covered up to $500,000 total since each person gets their own $250,000 limit.

More money in the account: When two people are putting money in, you’re more likely to meet minimum balance requirements and avoid fees.

Simple money management: You can both see where money is going and work toward shared goals like saving for a house or vacation.

No probate hassles: If one person dies, the other automatically gets full access to the money without going through legal proceedings.

Cons

You’re both stuck with overdraft fees: If your partner overspends and the account goes negative, you’re both responsible for the fees — even if you had nothing to do with it.

Breakups get messy: If your relationship ends, you’ll need to figure out how to split the money and close the account, which can get complicated fast.

Creditors can go after shared money: If one person gets sued or has debt problems, creditors might be able to take money from the joint account, even if it’s “your” money.

Zero financial privacy: Your partner will see every transaction you make from the account — no surprise gifts or private purchases.

Anyone can empty the account: There’s nothing stopping either person from withdrawing all the money at any time.

Is a joint account right for you?

Joint accounts work best when you have shared expenses and complete trust. Here’s when they make sense:

Good situations for joint accounts:

• You’re married or in a serious long-term relationship and share most expenses
• You’re helping aging parents manage their money
• You’re business partners who need shared access to company funds
• You’re saving together for a specific goal like a house down payment

When to skip joint accounts:

• You want to keep your finances separate and private
• You don’t completely trust the other person with unlimited access to money
• You’re in a new relationship or not sure about long-term commitment
• You have very different spending habits or money philosophies
   

The bottom line: if you’re hesitating about whether you trust someone enough for a joint account, that’s probably your answer.

Related reading: Should couples have separate or joint bank accounts?

How to open a joint account

Opening a joint account isn’t much different from opening a regular account, but both people need to be involved.

1. Pick your bank. Not every bank offers joint accounts, so make sure the one you choose does. Compare fees, minimum balances, and features just like you would for any account.
2. Bring the right documents. Both people need government-issued ID, Social Security numbers, and contact information. Some banks want proof of address too. Many banks require both people to be there in person, though some let you add the second person later.
3. Have the money conversation first. Talk about what happens if one of you dies, how you’ll handle disagreements about spending, and what the account is actually for. It’s awkward but necessary.
4. Read the fine print. Some banks require both people to agree before closing the account. Others let either person close it alone. Know the rules before you sign up.

Account comparison tool

Find the best joint account options by comparing Bankrate’s top checking accounts and best joint checking accounts for couples and families.

What banks want to know about both people

Banks will ask for the same information they’d want for any account, but from both people. That means ID, Social Security numbers, addresses, and sometimes employment information.

Some banks also check your banking history to see if you’ve had problems with overdrafts or closed accounts. If either person has banking issues, it could prevent you from opening the joint account.

How to close a joint account

Closing a joint account requires more coordination than closing a regular account.

• Agree on how to split the money before you do anything else. Both people need to be on the same page about who gets what. Also make sure there are no pending transactions that could cause problems after the account closes.
• Take out all the money. Some banks require both people to sign paperwork to close the account, while others let either person do it alone. Check your bank’s policy first.
• Set up individual accounts before closing the joint one if you don’t already have them. You’ll need somewhere to put your money.
• Cancel automatic payments and deposits. Update any bills or paychecks that use the joint account so you don’t end up with failed transactions.

Most banks take a few days to fully close the account, and some charge fees if you close it too soon after opening. If you need more information, here’s our full guide to closing a joint checking account.

Tax stuff you need to know

How taxes work on joint accounts depends on your situation.

If you’re married and file taxes together, just include all the interest from joint accounts on your regular tax return. Easy.

If you’re married but file separately, or you’re not married, it gets more complicated. Usually, whoever’s Social Security number is first on the account gets the tax form (called a 1099-INT) and has to report the interest income.

But here’s where it gets tricky: If most of the money earning interest came from the other person, you might need to split the income appropriately on your tax returns. For big amounts, talk to a tax professional.

For business joint accounts, the interest usually goes on the business tax return instead of personal returns, but this depends on how your business is set up.

State taxes might be different, especially in community property states where married couples’ income gets treated differently. When in doubt, ask a local tax expert.

Bottom line

Joint bank accounts can make life a lot easier if you share expenses with someone you trust completely. The convenience of one shared account plus double FDIC coverage are real benefits. But they’re not right for everyone. If you value financial privacy, don’t want to be responsible for someone else’s money mistakes, or aren’t in a fully committed relationship, individual accounts are probably better.

The key is being honest about your relationship and comfort level. Starting with a joint account for just shared expenses while keeping individual accounts for personal money is often a good middle ground.

Ready to explore your options? Compare joint checking accounts designed for couples and families, or check out high-yield savings accounts that work for both individual and joint ownership.