In this guide
- What is a joint bank account?
- Can you open a joint account without being married?
- Can you have more than 2 people?
- Pros of a joint account
- Cons of a joint account
- What do you need to set up a joint account?
- How to open a joint account
- Can I open a joint account without the other people present?
- Can I remove someone from a joint bank account?
- How to close a joint account
- What to do if there are disagreements
- Should I get a joint bank account?
- Split The Bills
What is a joint bank account?
A joint bank account is where two or more people are able to access the money in a bank account. These accounts are just regular bank accounts. Join account holders can all pay into the account to cover expenses like bills, write cheques or withdraw cash.
Can you open a joint account without being married?
Yes. You don’t even need to be living at the same address to open a joint account. If you already know the people you will be living with it, it might be worth setting up a joint account beforehand so you can get bills organised ASAP.
Can you have more than 2 people?
Yes, it is possible but not that common. Some banks will only offer 2 account holder positions, some will go as many as four. The more account holders to a joint account, the more you’re risking your finances and credit rating.
Pros of a joint account
Choosing to pay your bills via a joint account offers a number of advantages:
With everyone in control of the accounts, the workload of organising bills and finances are shared, so a single person isn’t left with the responsibility. It also means you are all kept in the know about the joint financial situation.
You can make regular payments into your joint account relatively easily. This saves the effort of transferring money to and from your housemates every month.
Save some arguments
With multiple bills and multiple housemates, things get complicated. Friendships can break down when money is involved and people start to feel cheated and confused. A single account for bills makes things much easier.
Cons of a joint account
Shared responsibility is a benefit, as long as all housemates take on the responsibility. You are all responsible for the account, and if payments start lagging behind because someone hasn’t paid into the account, you will all be held accountable.
An often overlooked aspect of joint bank accounts is that all account holder will be co-scored. If one of your housemates has poor credit history it will affect your credit rating the moment you open up a joint account with them. This co-scoring will stick for six years, even if you have closed the joint account.
Paying someone else’s debt
Because of the shared responsibility of the bank account, if the account becomes overdrawn, every account holder is responsible for paying the money owed. Therefore, you could become responsible for paying someone else’s debt.
What do you need to set up a joint bank account?
You will all need a few items in order for the bank to open a joint account for you. The required things varies from bank to bank, so it’s worth checking with your chosen one.
You will need:
- Proof of ID – this can be a passport or photo ID driving license.
- Proof of address – This can be a bank statement or utility bill which has been issued within the last three months.
- A good credit rating – This is to minimise any risk for the bank when opening an account for you.
How to open a joint bank account
Opening a joint account is similar to opening a normal current account. Each account holder needs to fill in their section of the application form and provide the evidence mentioned above.
You will want clarification on the following points, as they may vary from bank to bank:
- Who can take money out without getting permission? – It might be worth electing a responsible housemate.
- How will overdrafts be handled? – Usually every account holder is responsible for paying all the money owed. Issues may arise if someone also has a current account with the bank. They may find the bank takes money from their current account in order to cover the costs of missed payments on the joint account
- How best to handle disagreements amongst account holders?
Can I open a joint account without the other people present?
Every account holder will need to sign documents and present evidence in order to open a joint bank account. Some banks may give you an extra day so the other person(s) can sign etc. – discuss with your bank of choice beforehand.
Can I remove someone from a joint bank account?
Yes. Say, for example, one of your housemates is moving out, you should be able to remove them as an account holder. Your bank will need signed permission from everyone on the account in order to remove someone. Banks may also ask for identification documents or to visit them in-branch as well.
How to close a joint account?
All account holders will need to agree to close a joint bank account. This is normally done in writing, but some banks may require you to come in-branch. You will need ensure all debts/overdrafts and direct debits are organised as you will not be able to close without them.
What to do if there are disagreements with other account holders?
If you’re having problems with your housemates/account holders – the most sensible thing to do is cancel the mandate.
This freezes the account so no one is able to withdraw any money until the dispute is settled. The account will only unfreeze once everyone agrees on how to split the money. Worst case scenario, the courts may have to get involved, but until then, at least your money will be safe.
Should I get a joint bank account?
You should think long and hard about whether a joint bank account is worth it for you. You must trust your housemates to pay their dues, keep the money safe and stay calm during any future disagreements. You will also need to ensure your housemates have a good credit rating that is unlikely to change (we’re not all sensible with our student loans!).
Basically, if you have any doubts about sharing an account with your housemates, it’s probably best to avoid it.
The easier way – Split The Bills
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