Can Unmarried Couples Have a Joint Bank Account?

Opening a Joint Account as a Couple or With a Roommate

A joint account is a financial account with two or more different owners. All owners have full access to the account, meaning they can withdraw and deposit or even close the account without the permission of the other account owner. However, joint accounts aren't exclusively reserved for married couples or close relatives. Many financial institutions allow unrelated individuals, such as domestic partners or roommates, to open joint accounts.

While joint accounts make it easy to handle shared expenses and financial commitments, it's essential to think carefully and communicate clearly to ensure everyone agrees on financial responsibilities and expectations. Here are several types of accounts that you can consider opening jointly with someone, regardless of your marital status or relationship:

• Joint checking account: A joint checking account can be used for day-to-day expenses, bill payments and shared financial responsibilities.
• Joint savings account: This type of account can help you save collectively for shared goals, such as vacations or emergencies.
• Joint credit card account: Some credit card issuers allow joint credit card accounts, enabling you both to make charges and build your credit on the same card.
• Tenants in common account: This account structure is typically used for investments or real estate, allowing each account holder to own a specific portion of the account.

It's important to note that certain accounts, like an individual retirement account (IRA), cannot be jointly held; each person needs to open their own account. Be sure to check with your financial institution about the account types available for joint ownership in your situation.

If you're just looking for help managing an account you already have, you don't actually have to open a joint account. Ask a manager at your local bank branch about a "convenience account" or "agency account." With these types of accounts, the money in your account remains yours, but someone else's name will be on the account to help you with bill paying and making other transactions.

How to Open a Joint Account

Opening a joint account involves several straightforward steps, similar to opening any other standard account:

1. Research financial institutions. Look for banks or credit unions that offer joint account options and compare their terms, fees and services.
2. Gather documents. Both account holders will typically need to provide official identification, Social Security numbers and other personal information.
3. Complete the application. Fill out all the necessary application forms provided by the financial institution.
4. Deposit funds. Make an initial deposit to fund the joint account.
5. Set up access. Decide how you both will access and manage the account, including online banking, debit cards and checks.

Important Considerations When Opening a Joint Account

Before opening a joint account, it's critical to consider potential scenarios and establish clear guidelines to protect yourself and the other person. Here are some important things to keep in mind when opening a joint account.

• What happens to the account (and the money) if you split up? Unfortunately, relationships and friendships don't always stand the test of time. Be sure to make a plan (in writing) for what happens to the account and its funds if the relationship changes or dissolves to avoid getting into a financial bind.
• Track your contributions to the account. Keep track of each person's contributions to the account to avoid misunderstandings down the line and make splitting up funds easier if it's necessary.
• Consider legal implications. Understand that each account holder generally has full access to the account and can make transactions without the other's approval. If you're concerned that the other person may clean out the account without your knowledge, it may be best not to open a joint account.

Opening a joint account is easy, but don't make the decision lightly. It's worth ensuring you're comfortable with the entire scenario before moving forward. This means you're opening the account with someone you truly trust, share clear financial goals with and with whom you have solid communication. If you feel pressured to open a joint account with someone, that's usually a bad sign; pause the process if that happens and reevaluate whether it's the right move.

Tips for Sharing Finances With a Partner or Roommate

Sharing finances requires clear communication and mutual understanding. Here are some tips to consider:

• Decide how to split expenses. Divide shared expenses based on each person's income and financial obligations.
• Create a joint budget. Establish a joint budget to track income, expenses and savings goals.
• Regularly review finances. Set aside time to review your financial situation together and make any necessary adjustments.
• Maintain individual accounts. Consider keeping separate individual accounts for personal spending and financial privacy.
• Communicate openly: Keep the lines of communication open to address any financial concerns or changes in circumstances.

The Bottom Line

Opening a joint account with a partner or roommate can streamline shared finances and make managing expenses more convenient. However, while joint accounts offer benefits, they also come with responsibilities. By discussing expectations, planning for the future and communicating openly, you can make informed choices that align with your unique situation and goals.