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. Joint account holders can all:
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 might be worth setting up a joint account beforehand so you can get bills organised ASAP.
Yes, it’s possible but not that common. Some banks will only allow two account holders, others will accept as many as four. The more account holders you have on a joint account, the more you’re risking your finances and credit rating.
Choosing to pay your bills via a joint account offers a number of advantages:
With everyone in control of the accounts, you share the workload of organising bills and finances, so a single person isn’t left with the responsibility. It also means you can all keep up to date with your 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.
With a number of bills and several housemates, things can 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.
Shared responsibility is only a benefit when all housemates take on the responsibility of managing the account. If payments start lagging behind because someone hasn’t paid into the account, you’ll all be held responsible.
An often overlooked aspect of joint bank accounts is that all account holders will be co-scored. This means that if one of your housemates has a poor credit history, it will affect your own credit rating the moment you open up a joint account with them.
This co-scoring will stay on your credit record for six years, even if you’ve closed the joint account.
Because of the shared responsibility of the bank account, if the account becomes overdrawn every account holder is responsible for paying the money owed. This means you could have to pay someone else’s debt.
The bank will need a few items from each of you to be able to open a joint account. What they need varies from bank to bank, so it’s worth checking with yours.
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.
Make sure you clarify each of the following points, as they may vary from bank to bank:
To open a joint bank account, every account holder will need to sign documents and present evidence. Some banks may give you an extra day so the other person (or people) can sign and so on, so discuss this with your bank beforehand.
Yes. Say, for example, one of your housemates is moving out, you should be able to remove them as an account holder.
However, your bank will need signed permission from everyone on the account to remove someone. Banks may also want to see identification documents or ask you to visit them in-branch as well.
All account holders will need to agree to close a joint bank account. You normally do this in writing, but some banks may need you to come into a branch. You’ll need to pay off all debts/overdrafts and organise your direct debits, as you’ won’t be able to close the account otherwise.
If you’re having problems with the other account holders, the most sensible thing to do is cancel the mandate on the account.
This freezes the account, meaning no-one can withdraw any money until you’ve settled the dispute. 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.
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 share, keep the money safe and stay calm during any disagreements. You’ll also need to make sure your housemates have a good credit rating that’s unlikely to change.
Basically, if you have any doubts about sharing an account with your housemates, it’s probably best to avoid it.
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