What are joint savings accounts?

If you’re planning on saving with someone you trust, it can be a hassle to calculate between separate accounts. That’s why a joint savings account can be pretty useful. But what are they and how do they work?

A joint savings account has more than one owner who can withdraw and deposit into the account, each with their own debit card. These accounts are usually opened long-term for married couples pooling their finances. However, they can be used short term, like if two people are saving together for the same goal (e.g. a home deposit).

While accessing shared funds through a joint savings account can be convenient, there are also drawbacks. You should always be careful and consider all the details and make sure that all parties involved are clear about their responsibilities to each other. 

There are two kinds of joint savings accounts that can affect how you access your money. Whichever type you choose will depend on who you’re opening the account with and what the collective goal is.

1. Both people must sign

Joint accounts require both parties to sign for transactions. This offers more control and is good for monitoring shared money, like in business ventures or flatmates paying rent together. However, it makes accessing funds harder, as both signatures are needed. If one person is unavailable, the other can't withdraw money, even in emergencies. But if you're saving for a goal and don't need the money soon, this could help both parties stay on track.

2. Either person can sign

For situations where you feel a little more comfortable with freely sharing the funds - like with married couples - you can opt for an account where either person can withdraw funds at any time, without the permission of the other.

It’s a more flexible option, but should really be reserved for people you trust wholeheartedly as they’re within their rights to take all the money out, and if they rack up a bunch of fees, then you’re both responsible for paying them.

A joint savings account should only be opened between trustworthy partners like parents, siblings, partners, and close friends in niche situations. 

Opening a joint account with someone you don't know well is probably not a good idea. Opening an account with a new romantic partner or friend can be iffy since money can create friction within relationships.

So, if you find yourself considering a joint bank account, first, ask yourself:

When you open a joint savings account, make sure you’re on the same page as the other person about how you spend and save. That way, there are no dramas and you can get clear about the savings goal you’re working towards.

There are a few ups and downs to pooling your money with someone, even if you’ve decided you trust them not to blow the budget. 

So, check out the table below for all the pros and cons that aren’t so much about who you’re sharing the account with, but having a joint savings account itself.

Budget savings

Having a budget can make the responsibilities of all parties clear. It can involve making decisions about how much each person will contribute each month, how much is spent on essential bills and expenses, and how much is reserved for spending money. 

Jump onto our budget calculator to get an idea of what your spending and saving is looking like. Remember, the clearer your budget, the less likely you are to wind up having problems later on.

Communicate joint account responsibility

If you’re going to open a joint account, it’s important that you can talk to the other person about any issues and responsibilities. That might include:

• Who is in charge of paying joint bills?
• Should some finances be kept separate?
• Do either of you have commitments that the other is not responsible for (like child support or loans from the past)?
• What will you do if you can no longer keep the account together?

Getting these things out in the open is important to make sure everyone is happy with the situation.

Set savings goals

Part of your budget should be a plan to put away savings each month, and a goal that those savings are going toward. This will keep you on track with your savings, and can also make it easier to allocate parts of your budget.

For example, if you’re saving up for a home loan deposit, you may want to allocate any leftover money to that, instead of spending it on takeout or shopping sprees.

Having a goal can also be useful to keep you united in money matters. For people who aren’t used to sharing money, it can feel a bit dictatorial to have another person looking over their shoulder - setting a joint goal can help make it feel like a team effort, rather than snooping in each other’s business.

Different providers will often have different processes, so make sure to double check what accounts are allowed. To search for high interest savings accounts, head over to our hub page or browse some of the accounts below…