Are you and your partner considering to open a joint account? Then, before you apply for it you should analyze some issues. Check these tips and make sure you are ready!
Joint accounts may seem a good option as a money management method in a relationship, like married couples or young adults and their parents.
Nevertheless, you should take into account some tips before signing up! These types of accounts may come with a cost you should consider.
1- Opening a joint account but keeping your separate accounts
You might consider opening a joint account but keeping your separate accounts, as well. If so, talk to your bank about linking both of your individual accounts to the joint account. Linking lets couples maintain independent control of their checking accounts while sharing a joint account from which they can pay bills, manage household expenses, contribute savings, and handle other daily financial responsibilities.
Having a joint account can be a good option when you share a home and expenses. But, you should first make sure your partner is reliable with money.
Bear in mind that both account holders will be able to withdraw money from the account, so make sure that your partner won't take advantage of it.
3- Vulnerable to financial mistakes
Check that the account owners do not have a collection of unpaid debts! The creditor can use the joint account to pay those debts. This means you may find out that the money in your account has been drained just to pay the debts of your partner.
4- Impact your credit
As well as it happens with your personal account, having a joint account will also have an impact on your credit score. So, your partner or child's credit rating can end up having an impact on yours.
5- Any co-owner can close the account
Although some banks require the consent of both parties to close a joint account, most do not. This benefit has been set based on the fact that one of the parties may relocate or passes away. Nevertheless, this benefit can be used by one of the co-owners to withdraw the money, close the account and then disappear. So, make sure you completely trust your account partner!