Joint accounts

A joint account is a bank account that more than one person can use. It can make it easier to manage shared costs, but it comes with the risk of sharing access to your money.

A joint account can be any kind of bank account: savings, transaction or term deposit. The type you choose depends on who you're sharing the account with and why. For example, you might choose a savings account if you and your partner are saving for a house. Or a transaction account if you're sharing rent and groceries with housemates.

Benefits of joint accounts

Opening a joint account can have benefits:

• It's easier to pay for shared costs from one account
• You'll have fewer bank fees to pay
• All account holders oversee the money

A shared account for shared bills

You and your partner or housemates may decide to open a joint account for your shared bills. Discuss what bills you will pay with your shared account and how much you will each contribute.

Risks of joint accounts

Before you get a joint account, consider if you want to share your money with someone else. 

Shared use of the money

Having joint access means the other account holders can take money out of the account. 

Some accounts need one account holder's signature to use the account. Other accounts need everyone to sign. Think about which option works best for you. Are you happy for other account holders to get money from the account without your signature? Are they happy for you to do the same?

Transaction accounts come with debit or transaction cards that account holders can use to withdraw cash and buy things. Consider who will have debit cards and how they will use them.

Responsibility for debt

When you have a joint account, you share liability for any debts connected to that account. 

If another account holder runs up debt on that account, it could harm your credit report.

How to open a joint account

Once you've chosen an account, contact the bank. They will guide you through the application.

Typically, if you already have an account with the bank, you can apply for a new account online in a few minutes. If not, you may need to apply at a branch. 

How to close a joint account

Follow these steps to close a joint account.

1. Agree to close the account

All account holders need to agree to close the account before the bank will let you close it.

2. Check your direct debits and credits

Ask the bank to give you a list of direct debits and credits from the last 12 months. This will help you work out which ones to cancel or redirect to a different account.

3. Clear all money in the account

If your account is overdrawn, you'll need to pay it off before you can close it. If there's money left in the account, decide how to divide it between you and the other account holders.

4. Close the account online or call your bank

Follow your bank's guidance to close your account online. Or call your bank and ask them to close the account. All account holders need to be present for the closure, so the bank can verify each account holder's identity.

5. Get confirmation from the bank

Ask the bank to confirm in writing when the account is closed and keep a copy for your records.

Costa's girlfriend takes him for a ride

Costa works interstate a lot. He decided to open a joint account with his girlfriend, Jenny. The joint account meant he wouldn't have to worry about paying his bills when he was away. Jenny would arrange it for him.

A few weeks later, Costa checked his account to make sure his boss had paid him that week. He was shocked to find there was no money in the account. Costa tried to contact Jenny but she wouldn't return his calls. He rang his bank and found she had withdrawn all his money. She could do this as it was a joint account that did not need his permission for withdrawals.

Costa decided to get a separate bank account and set up direct debits for his bills instead, so they can be paid automatically.