If you manage money with your spouse or partner, having a joint bank account will make your financial life sorted and easier. A lot of couples nowadays are opting for joint savings accounts for the many benefits it offers. In this post, we will look at what a joint bank account is, how it works and the benefits it offers to couples.
What is a joint bank account?
A joint account is a bank account that is shared with another person. The account is mostly used to pay bills, save for vacations, make downpayment for a big investment, deposit paychecks, and more things. A joint account is held by one individual and a co-applicant that could be a spouse, family member or business partner. But, any two individuals can open a joint account together.
How does a joint bank account work?
A joint bank account functions like any other bank account. You can write cheques, use a debit card, access the account online, and receive interest. The major difference is that both the people owning the joint account have full control over it. Either of them can use a debit card and issue a cheque. Two cheque books and two debit cards are given to account holders. They can add funds or withdraw money from the account, anytime.
The access can be defined at the time of account opening basis Mode of Operation.
In short, the money in both the accounts belongs to both the owners. Any fixed deposit connected to the account has both the account holders as the main beneficiaries.
Advantages of a joint account for couples
There’s no doubt that a joint account makes money management easier for couples. There’s no need for income payment levels of each account holder, no need to update the expenses spreadsheet daily/weekly/monthly. Besides, all the expenses are paid from the family account, which makes future planning and savings easy.
Tracking the budget and investment gets easy. Also, there is no division of resources on a monthly basis and no need to make any financial changes in case there’s an addition of a member in the family.
There’s an ease of tracking with joint accounts. The other benefit is there’s no income disparity when paying the bills. Both the partners have the freedom to buy what they want and work on the goals and retirement plans together.
The Bottom Line
Managing money together is a big step in a relationship. Before you open a joint account, explore the options and find the right account that meets your financial goals in the short as well as long run.
In the event of any holder being stuck in medical emergencies, the fund can be used by other holder seamlessly. In the tragic event of death, the fund can be directly accessed so is kind of a Will and advantageous over Individual Account with a Nominee facility which doesn’t ensure direct access unless backed by proper claim.
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