How to Combine Bank Accounts

Shot of a young couple going through paperwork at home

Combining bank accounts with your partner may make sense in many scenarios, especially for couples who've recently tied the knot. Since you're sharing the bills, consolidating your funds into one account may simplify your finances.

Merging your bank accounts may sound like a daunting task, but it's actually relatively simple. You can combine bank accounts by gathering the necessary information and deciding what type of account to open. Here are the steps to take.

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How to Combine Bank Accounts

Follow the steps below to join accounts and tackle your finances together.

1. Choose a Bank

Combining your bank accounts starts with deciding where you want to bank. You might decide to combine accounts into an existing one you or your partner are satisfied with. Alternatively, you could open a joint checking or savings account at a new bank. When choosing a bank, consider the following factors:

  • Online or traditional bank: Online banks often offer higher annual percentage yields (APY) on checking and savings accounts and lower fees. However, you may prefer a traditional bank if you want a more comprehensive range of financial services and the option for in-person banking.
  • Account types: In addition to checking accounts, make sure the bank offers other account types you may be interested in, such as certificates of deposit (CDs), high-yield savings accounts and credit cards.
  • Interest rates: Many banks offer interest-earning checking accounts. Compare interest rates on deposit accounts to determine where your money will earn the highest yield.
  • Branch locations and ATM access: Check to make sure you can deposit and withdraw money easily without incurring fees.

2. Open a New Account or Combine Existing Ones

Whether you're opening a new bank account or merging your current ones, you'll need to share some important documents with the bank, such as:

  • Passport, driver's license or other government-issued identification
  • Social Security card
  • Proof of address (mortgage document, utility bill or bank statement)

Next, call the bank or visit a branch office together to open your new account or add your partner to your bank account. Upon verification of both parties' documents, the bank will help you create a new joint account or add a joint owner to an existing account.

While you're at it, you might consider combining your savings into one joint account to help you save for shared goals, such as a new car, vacation or down payment on a home. Or keep your savings accounts open and use them for different goals.

3. Move Direct Deposits and Recurring Payments to the Joint Account

With your joint checking account now established, begin moving your automatic transactions to the new account. Start by redirecting your direct paycheck deposits to your new account by providing a new authorization form to your employer with your new account's routing and account numbers.

If you're sharing responsibility for bills, you'll want to add any recurring bill payments to your new account. Cancel automatic payments from your old account, but understand your bank could take 30 to 60 days to process your automatic payment enrollment form. As such, it's wise practice to check the accounts linked to your automatic payments to ensure none are missed.

4. Decide Whether to Close Unused Accounts

If you'll no longer use the old account, it may be a good idea to close it. However, you should wait a few weeks before doing so and leave a small balance in the account to cover any overlooked charges that may come through.

On the other hand, you may want to keep the old account. Many couples prefer to keep a joint account for shared expenses and separate ones for their individual spending or "fun money." You can also keep more than one savings account and use them for different purposes, such as an emergency fund or sinking fund to save for a down payment.

However you choose, make the decision together, as money issues have the potential to divide couples.

Learn more >> 6 Ways to Manage Multiple Bank Accounts

5. Close the Old Bank Account

Once you're certain your direct deposits and auto payments are executing smoothly, transfer any remaining funds from your old account to the new one. You may be able to withdraw the final amount from an ATM or electronically transfer the funds.

Cancellation procedures vary by financial institution. However, you can typically close your account by contacting your bank over the phone or from your online dashboard and asking a customer service agent to close it.

When Should You Combine Bank Accounts?

Sharing a joint checking account with a partner isn't the only scenario in which combining bank accounts makes sense. Here are some other times you may want to combine bank accounts:

  • When supporting aging parents: If you're helping your elderly parents manage their finances, sharing an account can provide a convenient way to monitor transactions and make sure bills are paid on time.
  • When assisting a child attending college or trade school: A joint account with your college-bound child makes it easy to transfer funds for tuition, living expenses and other necessary spending.
  • When you share expenses with a co-parent: A joint account can be essential if you share health insurance, child care and other child-related expenses with a co-parent. You may have a legal obligation to help cover these expenses through child support. Consider consulting an attorney to set up this arrangement properly.
  • When seeking more FDIC insurance: The Federal Deposit Insurance Corp. (FDIC) insures deposit accounts up to $250,000 per account holder and ownership category. This means a couple could be insured up to the FDIC limit in a joint account and also separately for the same amount in individual accounts—$500,000 total for the joint account and $250,000 for each individual account.

Will Combining Checking Accounts Hurt Your Credit Score?

Generally, opening a new joint checking account or adding your partner to your existing account won't harm your credit. Using your account irresponsibly, however, could negatively affect your credit score.

For example, if you cancel your old account but still owe money, perhaps due to overdrafts, you must pay the balance to settle the account. If you don't, the bank could pursue the debt through collections. In this case, the collection account could appear on your credit report for up to seven years and potentially reduce your credit score.

The Bottom Line

Combining bank accounts with a partner makes managing your joining financial life easier, but it's not something all couples opt to do. Before merging your accounts, be sure you've had conversations on spending and savings goals, who is responsible for what bills and how you will manage money you keep in separate accounts (if any).