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Checking accounts are one of the most common types of bank accounts, simplifying money management by allowing you to make purchases and send and receive money without physical cash.
Things can get trickier when deciding whether to maintain an individual checking account or to have a joint checking account with a loved one. A joint checking account is a checking account that is shared by two or more people, where each person has equal access to the money.
What Is a Joint Checking Account?
A joint checking is just like an individual checking account. The only difference is that you share it with a joint account holder, who has the same level of access to the money and account.
This is different from adding an authorized user to a credit card, which may allow you to limit the authorized user's spending or account access. When you jointly share a checking account, you're both full account owners and don't need the other person's permission to deposit or withdraw money. This can be either a huge perk or major drawback depending on your situation.
Find Digital Checking Accounts
Checking accounts are made for daily spending, so unlike savings accounts, they typically don't earn much, if any, interest or have limits on monthly transactions. Money in checking accounts can be spent using a debit card or electronic transfers, though some accounts still allow writing physical checks. You can also withdraw money from checking accounts at ATMs.
Sharing an account can make life easier for couples who budget together. For some, however, it's better to keep accounts separate. You don't have to be married to open a joint checking account together; you can be an unmarried couple, a parent and child or even roommates.
Pros and Cons of Joint Checking Accounts
The potential ups and downs of sharing a checking account are similar to sharing a savings account. Here are some pros and cons to consider before opening a joint checking account.
Pros of Having a Joint Checking Account
- Easier budgeting: There are benefits to couples keeping money separate, but it can make bill paying tricky and require lots of back-and-forth Venmo payments. If you frequently share expenses with a loved one, and especially if you budget together, having a joint account can streamline your finances. A joint checking account can also be useful for one-off situations, such as planning a wedding, if you're sharing money and expenses with parents or other relatives.
- Simplified bills: Even if you and your spouse keep some finances separate, you likely share the cost of utility bills and groceries. You can still keep your personal checking accounts, but if you each move over a set amount to a joint account each month, shared bill payments can pull from the joint account. This also makes it easier for you both to see what bills were paid and when.
- Added oversight: Joint accounts aren't only for couples. If you set one up for you and your older kid, aging parent or other vulnerable loved one, you'll see every transaction they make. You may not be able to undo a purchase, but you can intervene if you see problems.
Cons of Having a Joint Checking Account
- Reduced privacy: Transparency can be beneficial, but there can also be too much. When you jointly share an account, both parties can see all of the financial activity. This may not bother everyone, but others may not want their partner or loved one to see how much they spent, where and when. This visibility has the potential to create conflict, and it can also make it difficult to keep surprises, like shopping for birthday gifts.
- Less control: A joint account gives both of you unlimited access to the money in your account, so you can't prevent your loved one from spending your hard-earned paycheck or withdrawing a chunk of the balance without consent. This can get messy if you're having relationship problems or splitting up. You might also get dinged with overdraft fees if your shared account holder overspends. This means sharing an account should only happen if you trust the person completely and are comfortable communicating openly about money.
- Increased liability: Sharing an account has more potential pitfalls than just the person having the ability to clean out the account. You also face shared liability should there be legal action against the other person, where a creditor wins a settlement and gains permission to seize money from the account.
Is a Joint Checking Account a Good Idea?
As with most financial matters, the answer depends on your personal situation. A joint checking account can absolutely be a good idea in some circumstances, like sharing one with a trusted spouse, which you each contribute to fairly and use to pay joint bills.
It can be a bad idea in other situations; for example, sharing the account with a spouse who's notorious for emotional spending, an irresponsible teenager or a parent with memory issues. If you keep a significant balance in the joint account and your loved one blows it without your permission, that money is gone (unless they purchased something that can be returned).
There are ways to mitigate risks: One way is to have additional checking accounts. It could be safer to keep the majority of your money in your personal account, then transfer over an agreed-upon sum to the joint account.
This option can work well for couples who want to maintain some independence while tackling bills together. Discuss how frequently you'll each add money and whether you'll contribute the same amount or a proportional amount based on income. You can then use the joint checking account for shared bills and expenses, while keeping your money to yourself.
This strategy can also work well if you share an account with an older child. You can keep the majority of your money in your personal checking, and move over only what's needed. If you need to give them a set amount of money each week or month, you can set up an automatic transfer from your personal account to the joint one. Or use a product specifically for teen banking that allows parental limits.
What works for one person may not work for you, and vice versa, so don't be afraid to experiment.
How to Open a Joint Checking Account
Opening a joint checking account is relatively simple, and there's no credit check. Here are the usual steps:
- Discuss your preferences. Checking account fees and benefits can vary among financial institutions, so talk with your joint account holder about each of your priorities before you look for an account. For example, does one of you want to open it with a bank you already use? Are there must-have features for one or both of you, like nearby branches, a modern app, interest-bearing or no minimum balance?
- Do your research and choose an account. Now that you know what you both do and don't want, start looking for the best checking account. You can start with your current banks or credit unions to see what they offer. Some websites allow you to compare multiple options at once.
- Open the account. When you've found the winning account and are ready to open it, the two of you can do it together in-person at a branch or online depending on the financial institution. Since you'll be joint account holders, you'll each need to provide some personal information and identification (things like proof of address, a government ID and/or Social Security number). You then submit an application; there's no credit check, but the bank will run a ChexSystems report to ensure you haven't had past issues with deposit accounts, like frequent bounced checks. One of you may also need to make a small opening deposit to officially create the account.
- Switch over existing payments. Are there any bills you pay automatically from your personal checking that will now come from the joint account? Go through your recent statements to make a list of all recurring payments, then update your payment information with those businesses. Make sure to also update any direct deposits or automatic transfers to investments or savings accounts.
The Bottom Line
There's another important thing to know about joint checking accounts: They don't directly impact your credit, positively or negatively. Because checking and savings accounts don't entail borrowing or repaying money, they're not part of your credit score.
That means you should make sure you're building your credit in other ways, such as paying all debts on time and using a credit card responsibly. If you don't currently have a credit card you love, you could use features from Experian to receive free, personalized credit card offers based on your credit profile.