Should Married Couples Have Joint Checking Accounts?

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You've joined your lives forever in marriage. Should your money be as well? For some, maintaining a joint checking account is a marker of commitment and maturity—evidence that you're partners with a financial future together—and it can even have some practical benefits.

But there are potential pitfalls with adjoined financial accounts, and it's important to know the ins and outs before you jump in. Whether a couple should have a joint checking account depends on a variety of personal and financial factors you both should consider in advance. Here is a quick primer to get you started.

What Is a Joint Checking Account?

A joint checking account is exactly what it sounds like: a checking account that belongs to more than one person—in this case, a married couple. Either person can add money to the account, withdraw from it or use it to make purchases.

The type of joint accounts most married people open qualifies them as equal co-owners in the eyes of the law, which means each person is entitled to half the money regardless of how much they've contributed. At any time, either account holder can withdraw up to 100% of the funds and can close the account without the approval of the other party. If one spouse dies, the account may also stipulate survivorship rights that pass the balance of the account to the surviving account holder without going through probate. For these reasons—and many others—opening a joint checking account is an act of trust.

Each account holder is insured up to $250,000 by the FDIC or NCUA, meaning your joint account carries twice the coverage of an individual account.

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Benefits of a Joint Checking Account

If you're going to share a life, joint checking can make managing money simpler. You don't have to take turns buying dinner or groceries. You don't have to open an app to square up on shared expenses. And you can easily save toward large purchases—or for the unexpected.

Whether you use it to manage all of your cash or limit its scope to a defined set of household expenses, a joint checking account offers these benefits:

  • Transparency: Everyone sees where the money is coming from and where it goes.
  • Trust: Shared responsibility and common goals are the stuff great marriages are made of.
  • Clarity: You'll know what your household income and expenses are, month by month. A joint account also offers a ready snapshot of your whole financial life.
  • Unity: A joint account is an asset you create together. It's your purchasing power, your family fortune. You aren't in this alone.

Downsides of a Joint Checking Account

Joint checking accounts can also create—or highlight—financial problems. Before signing up, consider the following:

Coordination is hard. With a joint account, either party can withdraw money at any time. This is a problem if your partner is the type to run off to Las Vegas with all of the money, never to be heard from again. But it's also problematic if either partner is careless. Overdrafts can easily happen, as can late deposits, crossed wires, simultaneous spending—the list of potential issues is long.

You're on the hook for each other. If one of you overdraws the account, you are both on the hook for fees. If one of you owes money, a creditor can go after your joint funds. If one of you spends the money that was earmarked to pay the mortgage or a credit card bill, the late charges and possible delinquency could affect your credit.

When deciding whether to open a joint account, consider the potential downsides to your marriage as well as the financial downsides. It's a fact that money can be a major source of tension in relationships, and if you think the stress of maintaining a joint account will outweigh its benefits or jeopardize your marriage, maybe it's best to avoid one.

Can a Joint Checking Account Affect Credit?

Checking account balances don't appear on your credit report and checking accounts do not directly factor into your credit score. So, unless your joint account results in missed payments or unpaid debts, keeping a joint account won't affect your credit.

That doesn't mean credit isn't a consideration when you're thinking about opening an account with your spouse. As joint account holders, making good financial choices and maintaining a problem-free account is consistent with being financially responsible and creditworthy. And any problems you do have with your account—including overdrafts or involuntary account closure—will be reported to ChexSystems, a banking reporting agency, and could affect your ability to get a bank account in the future.

Tips for Maintaining a Healthy Joint Checking Account

Still deciding whether to take the plunge? Here are a few tips on healthy joint account maintenance:

  • Consider keeping your individual accounts. It's certainly possible to manage all of your income and expenses through a single joint account, but it may be less aggravating to maintain individual accounts as well. You won't have to monitor each other's every trip to Starbucks, and you'll each maintain a sense of autonomy.
  • Define your parameters. You don't have to funnel every dollar into your joint account. Figure out what your monthly joint expenses are, add in a few dollars as a cushion and decide how much each of you will contribute.
  • Develop clear rules and roles. Although the money belongs to both of you, having one designated account manager may save you some trouble. Decide who will be spending from this account and how, then agree that the other person will only do transactions after consulting with the account manager in advance. That way, one person is responsible for knowing what's happening with the account. You can take turns being account manager, if that seems more fair.

Let This Experience Lead the Way

A joint checking account is a big symbolic step toward financial interdependence. Let your success serve as a foundation. Your financial life will likely include many other types of financial products and services—savings, credit cards, home loans, retirement and investments. By learning to communicate, collaborate and make good joint decisions about money, you're building toward a successful financial future.

To help protect your accounts and your whole financial life, consider both signing up for free credit monitoring through Experian. Experian will monitor the web for any of your personal information that may have fallen into the hands of an identity thief and alert you if anything is found.