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What Is a Joint Checking Account?

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  • Written By: Tricia Ellis-Christensen
  • Edited By: O. Wallace
  • Last Modified Date: 13 March 2014
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A joint checking account is a checking account shared by two people. Most often this arrangement is common when married couples commingle their funds. It can also be an option for a parent and child, or for partners, particularly gay partners that don’t have access to marriage or partnership rights under state or country law. In these circumstances, each participant in the joint checking account is entitled to all rights of the account, including withdrawal of all funds. Additionally, should one partner have unmet credit obligations or start bouncing checks, the full amount of the joint checking account could be accessible, though there are some ways around this.

Most joint checking account types work in the following manner:

  • Checks are issued in both party’s names and either person can write a check.
  • Each account owner has an ATM card that accesses the account.
  • Either owner can make inquiries of the bank and both could have online account access.
  • Both people deposit all or an agreed upon amount of funds into the account.
  • If there is difference in amount of funds deposited, this doesn’t affect use of total funds.

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There are very good reasons to have a joint checking account, especially for married or lifetime partners. Having one account can save money, especially in bank fees. Joint accounts don’t cost anything more than a single account. Another advantage is that if anything happens (illness, injury, death) to one of the partners in the account the other person has access to all funds immediately without any hassle. Providing this access makes good sense on many levels.

People shouldn’t necessarily be afraid of having to keep all money in the joint account. If both parties want spending money or money they don’t have to account for to the other partner, each partner could have a savings account or could simply pull out walking around money in cash after depositing paychecks. This can be very helpful if one person is drawn to impulse purchases and understands purchases can only be made out of the withdrawn money. Some also argue that couples are closer when they share and plan their financial lives together (though there are exceptions), and having joint accounts accomplishes this. Moreover married couples may already have access to each other’s funds and responsibility for each other’s debts if they live in a community property state.

Some people do argue against having a joint checking account. People with huge debt coming into a marriage might, if sued, end up costing their partners any money that’s held in the joint account. Others have very different spending habits and don’t want to have to modify these or account for how they spend their money. The decision not to hold money jointly can be problematic though, because it does mean that people will have to do extra coordination to get the bills paid on time if they are equally sharing in rent, food, and utility payments. In some cases, it’s recommended people don’t share a joint checking account. Those living together, for instance, may not have any type of legal protections if one person removes all money from an account.

The joint checking account is certainly a matter of consideration. It can be a convenient means to keep track of spending or it may turn into a power struggle. For those considering marriage or partnership, it’s a very good idea to decide in advance how finances will be commingled. This can provoke important conversations about financial plans once a lifetime commitment begins.

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Discuss this Article

anon155371
Post 4

Well said, suntan, but things happen. And I can guarantee that 99.9 percent of the time, people getting married are doing so with no intention of getting divorced.

With that in mind, it makes sense to make wise decisions concerning a future unknown by anyone. I'm currently trying to decide on a joint checking account for my wife and me, but given her unmotivated approach to everything, I don't trust her to be diligent when it comes to financial matters; so our account will be for bills and the like, but we'll keep our own separate accounts as well.

sunshine31
Post 3

Comfyshoes - I also heard that it may not be a good idea to have a custodial checking account or savings account in your child’s name.

The problem involves financial aid disbursements. When your child applies for financial aid for college the assets that are directly in his name will count against him when determining aid.

Instead of opening a minor checking account, it might be better to offer an allowance and a standard piggybank instead.

comfyshoes
Post 2

Suntan12 - I have to say that I agree with that last point. I also dislike custodial accounts.

Custodial checking accounts also require either the mother’s or father’s signature on the account. The child cannot legally take over the funds until they become an adult which is why a parent has to sign on the account.

This also occurs when children inherit money. Since children cannot inherit money it gets placed in custodial account until the child reaches the required age listed on the trust.

This is also why a lot of financial advisors recommend a trust for a child instead of listing them as a beneficiary on an account.

This way the trust is managed by the trustee and the funds are disposed of according to the terms of the trust. This also allows a parent to dictate that funds be given based upon various milestone ages so that the money is not spent at once.

In a custodial account with no trust, when the child reaches adulthood the money becomes theirs and they can spend it how they please.

suntan12
Post 1

I know that there are some people that have different opinions regarding joint checking accounts in marriage.

I feel that you should pool all of your assets together if you are married.

Getting married means joining in a union together and opening a joint checking account helps to sort out your finances better.

It also forces you to communicate more because you will have to inform each other about purchases made and money spent so that you don’t bounce any checks.

Some financial advisors like Suze Orman have no problems with someone owning a separate bank account from their spouse, but Dave Ramsey another financial guru that happens to be married advises against it.

He feels that if you cannot pool your money together than you might not be ready to marry the person because marriage is about sharing everything with another person.

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