Joint Bank Accounts: How and When They Work

Tony ArmstrongAugust 9, 2018

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Joint bank accounts function much like standard checking accounts but belong to multiple people, each of whom can contribute to and use the money in an account. That makes such accounts ideal for couples, parents and their teenagers, and adults assisting their aging parents. On paper — and in an ideal world — joint accounts are great. What could possibly go wrong? Well, a few things.

Here's a closer look at what to consider before opening a joint account.

Communication and trust are essential

Whether you’re planning on sharing an account with a child, significant other or aging parent, keep the channels of communication open. That may mean having difficult discussions about spending and saving habits. As uncomfortable as it may be, initiating these types of conversations can prevent even bigger headaches later.

“It’s important to lay out expectations with the other account holder,” says Carrie Houchins-Witt, a financial advisor. “If your teenager hasn’t quite grasped the concepts of saving and spending and personal responsibility, be careful about putting money in the account and expecting them to budget properly without your guidance.”

Let's dig a little deeper into the pros and cons associated with joint accounts:


  • Parents can monitor a child’s spending habits and can quickly transfer money to a joint account when necessary

  • Couples can use cash in a joint account to cover shared expenses such as rent, utilities and food

  • Adult children can help aging parents manage their finances

  • A joint account can be set up so that if a parent dies, an adult child can get immediate access to funds in the account, avoiding a potentially lengthy legal process

  • Each account holder is insured up to $250,000 by FDIC or NCUA insurance coverage at a bank or credit union


  • A child may spend too freely and become overly reliant on mom or dad refilling the account

  • Neither partner can control spending from the account, so one could drain it

  • One partner could overdraw the account, generating fees both would be on the hook to cover

  • If one holder lets debts go unpaid, creditors can pursue money in the account for settlements

  • Both holders can see transactions in the account, which can present privacy issues

» Looking for savings options too? See NerdWallet's best savings accounts

Know when to save (and spend)

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How to open a joint account

Setting up a joint checking account is much like opening a personal one. Here's what the process will probably look like:

  • Select the "joint account" option during the application process

  • Provide the bank or credit union with personal information for all account holders, such as addresses, dates of birth and Social Security numbers

If you’re opening a joint account with a significant other, don’t close your personal account, at least not right away. You may want to have money of your own for personal expenses or for gifts and surprises.

Ready to take the leap? Compare these checking accounts for a few solid options.

Specialty accounts could work, too

If you have a teenager, you might also consider opening a teen checking account. These accounts can have lower fees and may place daily restrictions on how much cash your child can withdraw from an ATM. However, you may have to open an account at a bank or credit union other than your own, which could make it more difficult to transfer money quickly and cheaply.

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