Joint Savings Account – What Are The Pros And Cons?

Posted January 18th, 2011 and last modified June 6th, 2014

If you’re thinking of taking out a joint savings account, consider the pros and cons now to ensure you don’t get caught up in a sticky situation later.

A joint account is a product for those who want to combine their savings together and open an account that both parties have access to and can contribute to. Essentially, you merge your money together in a special joint account with one or more partners and you can all access the funds in the account.

Joint accounts are appropriate for couples who want to save together, those wanting to establish a partnership, business partners or for people in established relationships who share bills and expenses.

Before you set up a joint account there are a number of things you should consider. These include the risk of the account (what happens if the relationship falls through?), the levels of contribution (will both parties equally contribute to the joint account?) and any debts your partner may have already incurred or will incur.

Rates last updated August 20th, 2014.

Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit
ING DIRECT Savings Maximiser
ING DIRECT Savings Maximiser
Earn a high interest rate of 4.00% p.a. variable rate for 4 months with no ongoing fee, no fixed term or minimum balance. 4.00% 2.75% 1.25% $0 $0 / $0 OpenMore
Bankwest TeleNet Saver
Bankwest TeleNet Saver
No Fees. No minimum monthly deposit. For balance up to $5,000,000 Earn a high 3.90% p.a. variable rate for 4 months. 3.90% 2.50% 1.40% $0 $0 / $1 OpenMore
HSBC Serious Saver
HSBC Serious Saver
Earn up to 4.00% p.a. for 4 months. An incentive to help you save by rewarding you every month if you don't make a withdrawal. 4.00% 2.70% 1.30% $0 $0 / $0 OpenMore
ANZ Online Saver
ANZ Online Saver
Take advantage of this bonus rate from ANZ. Exclusive online offer. 3.80% 2.50% 1.30% $0 $0 / $0 OpenMore
Westpac eSaver
Westpac eSaver
Earn 3.82% p.a. variable rate for 3 months with no minimum balance and no monthly service fee. 3.82% 2.50% 1.32% $0 $0 / $0 OpenMore
St.George Maxi Saver
St.George Maxi Saver
A competitive variable rate and no fees from one of the Australian most popular banks 4.05% 2.25% 1.80% $0 $1 / $1 OpenMore
Bank of Melbourne Maxi Saver
Bank of Melbourne Maxi Saver
Enjoy a high ongoing interest rate with no monthly account service fees. 4.05% 2.40% 1.65% $0 $0 / $1 OpenMore
Westpac Reward Saver
Westpac Reward Saver
Enjoy bonus interest each month if you make no withdrawals, and deposit at least . 3.71% 0.01% 3.70% $0 $0 / $0 OpenMore
ANZ Progress Saver
ANZ Progress Saver
Achieve your savings goal by making a minimum monthly deposit and earn a high ongoing interest rate. 3.71% 0.01% 3.70% $0 $10 / $10 OpenMore
HSBC Flexi Saver Account
HSBC Flexi Saver Account
A flexible savings account with online and branch access.Loyalty bonus when you make the minimum monthly deposit. 3.50% 2.50% 1.00% $0 $0 / $0 OpenMore
Easy Street Bonus Saver Account
Easy Street Bonus Saver Account
Be rewarded with one of the highest rates on the market each month you deposit $50 or more. 3.93% 0.01% 3.92% $0 $0 / $0 OpenMore
BankSA Maxi Saver
BankSA Maxi Saver
An extremely competitive rate from one of the most trusted brands. No fees, no hidden catches, no minimum term or minimum balance. 4.05% 2.50% 1.55% $0 $0 / $0 OpenMore
Easy Street - Easy Savings Account
Easy Street - Easy Savings Account
A high ongoing interest rate with no fixed term, no minimum balance and no fee. 2.75% 2.75% $0 $0 / $2 OpenMore

How does a joint account work?

Joint account

A joint account is essentially a bank account that two or more people share. These accounts tend to be opened by families, couples or business partners. Typically, to open one of these accounts you should have a high degree of trust between one another.

Once the account has been opened, all parties can make deposits, transactions or withdraw money. Joint accounts are typically long-term accounts but some can be short term when saving for something in particular, for example a car. If one party passes away, the others are responsible for the account and the debts incurred.

Some accounts can be high-interest accounts, especially those designed for saving or transaction accounts for making everyday purchases and paying bills. There are generally two types of joint accounts: ‘both to sign’, where both parties must sign off on transactions, or ‘either to sign’, where only one party must sign off on transactions. Whichever type of account you choose, it’s essential to know the other party will be responsible with the money.

Pros and cons of joint savings accounts

Pros

  • Fewer fees. People sometimes opt for joint accounts because they attract lower fees than having two separate accounts. One account has less ongoing fees and charges than two accounts./li>
  • Easier to manage. Often a joint account is easier to manage, particularly if the parties are both working towards the same financial goals or paying off the same expenses and debts such as a mortgage, rent or bills. These accounts work well for partners who spend their money in similar ways and on similar things already.
  • Safety net. Joint accounts can provide a safety net and a sense of being looked after if something was to happen to you. If you fall ill or have a bad accident and you don’t have a joint account, there can be a lot of legal red tape to wade through for someone to get access to your own account. With a joint account, if something happens to you, someone you trust will have access to your account and will be able to make decisions for you with the money in the account.
  • Establish partnership. A joint account is a good way to establish and prove that you are in a domestic relationship or partnership with someone. Showing your joint account documentation will be sufficient proof in most cases.
  • Establish equality. In some partnerships, particularly marriages, one partner may earn more money than the other due to other commitments such as raising children. A joint account is a good way to establish equality in the relationship and show you appreciate and value your partner’s non-monetary contribution to the relationship by allowing them to have access to the money in the account.

Cons

  • Trust. As mentioned, it’s extremely important to only enter into a joint account with someone you really trust. If you don’t, the other party can make withdrawals and transactions using the money from the account that you don’t approve of.
  • Debt. Another con with joint accounts is the debt that the other party incurs can be your debt. Also, in the case of death, your fellow account holder’s debts become your debts. This applies more to those opening joint credit accounts such as credit cards or home loans.
  • Differing contribution levels. A joint account may not be the right choice for those who contribute very different amounts. To some people, knowing that they are contributing more than the other party and they still have equal access to the funds can be off-putting. Many people do prefer to keep their funds separate for this reason, particularly when one is a higher earner.

How to apply for a joint account

If you have decided that a joint account is appropriate for you, applying is as easy as finding the one you like and clicking ‘Apply Now’. You then need to follow the link through to the lender’s website and initiate your application. Before you apply, there are some typical eligibility requirements to consider first. You must be a permanent Australian resident and have consent from all parties, while you may need an existing account with the financial institution.

You may also have to provide the following documentation for each partner/s along with your application:

  • Proof of identity
  • Financial institution account details
  • Contact details

Learn more about savings accounts

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8 Responses to Joint Savings Account – What Are The Pros And Cons?

  1. Default Gravatar
    | March 13, 2014

    We are looking for a joint bank account into which our income will be paid and from which most household expenses can be paid by cash or credit card. In addition we would like to have two separate private accounts with card access to which monthly amounts can be transferred for individual personal use. Finally we would like another joint savings account where we can transfer any surplus in funds at the end of the month. Can you recommend the best way of doing this in order to avoid paying account fees on every account? We do not have a mortgage so we can’t set up the accounts in a way that is attached to mortgage repayments.

    Many thanks for any help you can offer!

    Juliet

    • Staff
      Marc | March 14, 2014

      Hi Juliet,
      thanks for the question.

      There are a huge number of transaction accounts and savings accounts available which could be used for these purposes and which have low fees or fees which are waived after you deposit your salary into them. I’d recommend comparing the different transaction accounts and saving accounts in the market and then taking a closer look at any which satisfy your needs.

      I hope this helps,
      Marc.

  2. Default Gravatar
    Jane | February 25, 2014

    After opening a joint account can you then apply for joint credit cards? Do you need a joint account to apply for joing credit cards?

    • Staff
      Marc | February 26, 2014

      Hi Jane,
      thanks for the question.

      You do not need to open a joint bank account before applying for a joint credit card. Bear in mind that not every credit card accepts joint applications. Here’s a list of institutions which allow joint credit card applications.

      I hope this helps,
      Marc.

  3. Default Gravatar
    Judy | June 18, 2013

    If one partner dies, is the remaining person then sole owner of the account?

    • Staff
      Shirley | June 18, 2013

      Hi Judy,

      Thanks for your comment.

      Yes – unless the financial institution has be advised otherwise by writing.

      Hope this helps,
      Shirley

  4. Default Gravatar
    Judy | June 17, 2013

    If one of the joint acc owners dies, does the other automatically inherit the account?

    • Staff
      Shirley | June 17, 2013

      Hi Judy,

      Thanks for your comment.

      In most cases, yes – unless the financial institution has be advised otherwise by writing.

      Hope this helps,
      Shirley

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Rates last updated August 20th, 2014.
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