There are several different joint account options for you and your partner to explore in order to find the best system for your lifestyle and needs. These include a joint bank account, linked accounts, or keeping your accounts separate. Choosing the right option can help make managing your finances as stress-free as possible for both of you.
Joint accounts: The value of sharing
A joint bank account is just like a standard banking account, except that two or more people own the account. You and your partner can pay shared household expenses such as mortgage, car payments, utilities and groceries from the same place.
Withdrawing cash, writing checks and making online payments from one account also allows both of you to see how the money is being spent. With account activity visible to both of you, you may be less likely to splurge on discretionary items or make purchases in secret, and more likely to budget together as a couple.
Joint bank accounts can also help you plan and save toward shared goals such as a new home, a vacation, a household project or a new car. Pooling your money may help you meet minimum balance requirements that qualify you for features like waived maintenance fees, a higher interest rate or rewards.
Applying for a joint account is easy. You and your partner can apply for one online or at any Bank of America financial center. It’s the same as setting up an individual account, but you will both need to provide information and identification. (You can also add one partner to another’s existing account at a Bank of America financial center.) After you set up your account, you can both establish individual Online Banking profiles and access the account via Online or Mobile BankingFootnote1. That way you can each monitor and manage the account and set up alertFootnote2 preferences to meet your individual needs.
Separate accounts: Maintaining independence
Individual bank accounts grant each person the freedom to help maintain control over the money he or she earns. Partners may have different spending habits, so being able to manage money in one’s own way gives each person a stronger feeling of financial ownership.
If one partner is carrying a lot of debt or has mismanaged money in the past, a degree of separation can provide a sense of security for the other person — at least until the debt is paid off. Depending on the type of debt, both partners may be liable for overdraft charges, or be put at risk if a creditor seizes the account for unpaid bills.
The challenge with separate accounts is how to manage shared expenses. Determining who pays what can be a point of stress for couples. If you decide to maintain separate accounts, you and your partner should have clarity around this issue, and make sure each of you is comfortable with the arrangement.
Linked accounts: Yours, mine and ours
For some couples, linked accounts offer a happy middle ground between joint and individual options. A linked account is any account linked to another account at the same financial institution so that funds can be transferred electronically between them. You can both deposit the same amount each month into the joint account. Or, if one of you earns a lot more than the other, you may decide to contribute the same percentage of income instead of the same amount.
If your company offers direct deposit, you can have your pay go straight into your primary joint checking account every month. Then you and your partner can transfer a portion of your earnings to the individual accounts that are linked to your joint account. Your company may even offer direct deposit to more than one account, doing the work of dividing up your money for you.
Managing money together is a big step in any relationship. Trusting your partner, good communication, teamwork and, of course, knowing your options and finding the right bank account that best fits your needs can make the process much easier.
Ready to get started with a joint account? Learn more about Bank of America checking account options today.