What Is a Joint Checking Account?

Updated: May 22, 2024

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A joint checking account is a bank account owned and accessible by two or more individuals. It allows multiple account holders to deposit and withdraw funds, write checks and make purchases using the same account. Married couples commonly use joint checking accounts to pay household bills and manage shared expenses.

These accounts can also be beneficial for business partners, roommates splitting rent and utilities or adult children assisting elderly parents with finances.

Key Takeaways

Joint checking accounts allow two or more people to share access and responsibility for a single bank account.

Joint checking account benefits include easier budgeting, increased FDIC insurance coverage and shared account management responsibilities.

Opening up a joint checking account is like opening a standard checking account, but each account holder must sign and agree to the account terms.

How Joint Checking Accounts Work

A joint checking account allows two or more people to share equal ownership, access and responsibility over a single bank account. All account holders can deposit and withdraw money, write checks, make purchases with a debit card and make other banking transactions.

The account works like an individual checking account but with more than one authorized user. Any deposits made by any account holder go into the same shared pool of money. Withdrawals, purchases, bill payments and other debits are also deducted from this balance.

All account holders receive statements and have full visibility into balances and transaction history. Any account holder can handle tasks like ordering new checks or updating personal information.

Benefits and Drawbacks of Joint Checking Accounts

While joint checking accounts offer convenience, equal access to funds and shared responsibilities mean that account holders should be on the same page about managing the account wisely.

Benefits of Joint Checking Accounts

  • With funds pooled together, you can share budgeting, split expenses and pay bills from one account.
  • Joint checking accounts offer FDIC insurance coverage of up to $500,000 for two depositors, as each holder is insured up to $250,000.
  • Each account holder can contribute funds and handle banking tasks like deposits and transfers.
  • In the event of a death, the account automatically transfers to the surviving co-owner.

Drawbacks of Joint Checking Accounts

  • All account holders can view each other's transactions and spending habits.
  • One account holder's actions can impact the other through fees, overdrafts or account freezes.
  • Creditors can pursue funds in a joint account to collect on either holder's debts.
  • Any overdrafts, fees or penalties impact all parties equally.
  • Typically, closing a joint account requires consent from all holders.

Sharing a joint account can be wonderfully convenient or a difficult responsibility to manage, depending on your financial circumstances and the person you share an account with. Being well-informed and having clear communication can help prevent any issues before they arise.

Who Should Use a Joint Checking Account

Opening a joint checking account requires trust and communication between all account holders. Before merging your money, you should have an open discussion with your future joint account holder. Talk about your individual financial habits, budgeting styles and expectations for the shared account. Make sure you’re in agreement about how you will use and fund the account.

You may want to agree on some key ground rules, such as spending limits, overdraft policies, minimum balance requirements and who will be the primary monitor of account activity. It's also wise to have contingency plans for what happens if one person can’t contribute their share or your relationship changes.

A joint account can be beneficial for many types of relationships:

Account Holder Types
Description

Couples

Married partners often use joint accounts to pay household bills and expenses from a single pooled account.

Dependents

Parents can add children or dependent adults to a joint account to assist with money management.

Elderly Parents

Adult children may open a joint account with aging parents to help oversee their finances and pay expenses.

Business Partners

Co-owners of a business can use a joint account to pay shared operating costs and expenses.

How to Open a Joint Checking Account

Opening a joint checking account is usually straightforward, but making sure that all account holders have a shared understanding of what’s involved will help avoid surprises and mistakes.

1
Research Financial Institutions

Not all banks and credit unions offer joint accounts, so start by finding ones that do. Compare fees, interest rates and account features.

2
Gather the Necessary Paperwork

You'll need to provide identification documents, such as driver's licenses or passports, for all account holders. The bank may also require proof of address, Social Security numbers or other documents.

3
Submit the Application

Each account holder must review and sign the agreement documents and acknowledge the terms and conditions.

4
Make the Initial Deposit

A minimum opening deposit, typically around $25 to $100, is required to activate the new joint account after approval.

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SHOULD YOU STILL KEEP A SEPARATE BANK ACCOUNT?

Yes, even with a joint checking account, it’s a good idea to maintain a separate individual account. For example, a married couple could use the joint account for shared expenses like the mortgage and utilities while keeping personal accounts separate for independent spending.

An individual account also provides a backup in case issues arise with the joint account.

How to Close a Joint Checking Account

There may come a time when you no longer want or need a joint checking account, whether due to the end of a relationship, divorce, switching banks or other reasons.

If there are disagreements between account owners, the bank will likely freeze the account until ownership is legally determined, such as through a court order. In some cases, one party may be able to be removed from the account while the other keeps it open.

1
Discuss With the Other Account Holder

It’s a good idea to inform the other account holder of your intention to close the joint account.

2
Cancel Any Automatic Payments or Deposits Linked to the Account

Review the account for recurring transactions like bill payments, direct deposits or transfers.

3
Withdraw the Remaining Balance

Once all outstanding transactions have cleared, withdraw any remaining funds from the joint account so the balance is zero.

4
Close the Joint Checking Account

With the balance at zero, you can then provide written notice to the bank requesting full closure of the joint account.

WHAT IF YOU ENCOUNTER FRAUD OR UNAUTHORIZED TRANSACTIONS ON YOUR JOINT CHECKING ACCOUNT?

If you see suspicious activity in your joint account, you should speak with your joint account holder to see if they made the transactions. If not, contact your bank immediately and request new account numbers and debit cards. You may need to freeze the account temporarily.

Monitor future statements and sign up for text or email alerts from your bank so you're notified of any unusual activity.

FAQ About Joint Checking Accounts

We compiled answers to your frequently asked questions about joint checking accounts.

How do you manage a joint checking account?
Can a joint checking account affect your credit score?
What happens to a joint checking account if one account holder dies?
Can you remove someone from a joint checking account?
Who pays taxes on a joint checking account?

About Alvin Yam, CFP


Alvin Yam, CFP headshot

Alvin Yam is a certified financial planner (CFP) with over 15 years of experience working with individuals and corporations. Before founding Paraiba Wealth Management, he was a director at HSBC and a financial consultant at Charles Schwab. Yam is MoneyGeek's expert consultant on wealth management and personal banking.

Yam earned his bachelor's degree in political science from the University of California, San Diego and his Master of Business Administration from Loyola Marymount University.


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