What are the pros and cons of a joint bank account?

There are lots of potential benefits to getting a joint bank account but you also need to be aware of the disadvantages and risks before opening one

Young couple on sofa
(Image credit: Getty images)

Opening a joint bank account with a partner, family member or housemates is a popular way to cover shared bills and expenses. In fact, recent research from Virgin Money (opens in new tab) reveals that almost one in three (32%) of Brits already have a joint current account.

A joint account allows two people to pay a certain amount into the account each month so the account can be used to pay various monthly bills. 

It’s helpful as it prevents one person having to pay one or all of the bills and then having to chase up the other person to contribute towards those expenses.

But, there are potential downsides to opening a joint account which can have a negative impact on your financial situation which might explain why almost one in four of us (22%) say we would never consider getting a joint account.

We explain what you need to consider before taking the plunge and opening a joint bank account.

What are the best joint bank accounts?

Which joint bank account is best for you will depend on what you need.

Some characteristics of a joint bank account will be familiar. For example, a joint bank account can be managed using a mobile banking app, or via online banking, and have an arranged overdraft subject to credit checks and approval. 

Each person can spend money from the account and each has a contactless Visa Debit card.

Other characteristics differ, including:

  • the maximum number of people that can be added to a joint account
  • having an either-to-sign joint bank account (where any account holder can authorise transactions) 
  • having a both-to-sign joint bank account (where all account holders must authorise transactions)

Natwest, for example, offers a joint bank account (opens in new tab) that allows a limitless number of people to be added to it. But it is a both-to-sign account.

Meanwhile, TSB offers a joint bank account (opens in new tab) for a maximum of five people. It is a either-to-sign account.

Who can get a joint bank account?

Joint accounts can be opened by two people, sometimes more. These include couples, civil partners, friends, family members and housemates. Couples don't need to be married to have a joint account. 

Both parties will have equal access to the money in the account.

What are the benefits of a joint bank account?

There are several big benefits to having a joint bank account. They are:

  • Easier to pay joint bills - it saves you the constant hassle of sending money to the other person
  • Easier to track your joint spending
  • If one of the account holders dies, the other person (or people) has access to the money - saving them from going through probate which is an advantage if you are married or have children
  • You have FSCS protection up to £85,000 per person, as long as no person has another account with the same bank or building society. So if, for example, it’s a couple who have a joint account that’s FSCS protection up to £170,000 and if it’s five friends who have a joint account that’s FSCS protection up to £425,000.

What are the risks of joint accounts?

On the flipside, there are some risks to having a joint bank account. They are:

  • As soon as you share a financial product such as a current account with someone else you will be ‘co-scored’ by credit agencies. This means that their credit history is tied to yours, and taken into account when you apply for a new financial product. So if they have a poor credit score it will negatively affect you. 
  • An account holder could take money out of the account or go into the overdraft without telling you or asking permission
  • It can turn bad if account holders break up or fall out: one account holder could intentionally force the other account holder into debt by using the overdraft facility and refusing to pay it back
  • If you have a joint account and an individual account with the same bank or building society, the provider could even transfer money from your personal account to cover the joint account debt

Alina Jaffer, money expert at Virgin Money, says: “A joint current account can have a positive or negative impact on your credit score. It is important that you can rely on your other half to spend responsibly otherwise it may have future implications when lenders are deciding what credit or financial services to offer you.”

One account holder forcing the other account holder into debt by using the overdraft facility and refusing to pay it back is known as financial abuse. Dr Nicola Sharp-Jeffs, CEO and founder of Surviving Economic Abuse said, “Economic abuse is subtle. Abusers may introduce control through the guise of caring, for example pressuring you to close your bank account and opening a joint bank account together. 

“Setting up a joint account means your partner will have access to all the money you pay into the account. You will also be jointly liable for any debts, such as an overdraft which could be a problem if your partner can’t or won’t pay back what they owe.”

Be aware there is no legal avenue open to you to force the other account holder to return that cash.

There are steps you can take to mitigate against these things happening:

  • Discuss how the account will be managed before opening it. That means covering issues like how much you are each going to pay into the account, when that money is going to be paid in, and how the various bills are going to be split
  • Ask the person or people that you’re planning to open an account with to show you their credit score
  • Ask your bank to put a ‘two to sign’ mandate on the account, which means both parties need to sign for any withdrawals

How to open a joint bank account

To open a joint bank account you need to:

  • Fill in an application form
  • Provide proof of identity, such as a driving licence or passport, and proof of address
  • Agree to and sign on a mandate: an either-to-sign joint bank account (where any account holder can authorise transactions) or a both-to-sign joint bank account (where all account holders must authorise transactions)

How to close a joint bank account

You can close a joint bank account by filling in a form that must be signed by all account holders. You may need proof of ID.

Katie is staff writer at The Money Edit. She was the former staff writer at The Times and The Sunday Times. Her experience includes writing about personal finance, culture, travel and interviews celebrities.  Her investigative work on financial abuse resulted in a number of mortgage prisoners being set free - and a nomination for the Best Personal Finance Story of the Year in the Headlinemoney awards 2021.