Should Couples Have Joint Accounts?

Written by Syazwan Zulkifli

A joint account is a savings account shared between two or more individuals. While they can be opened by anyone, joint accounts are more commonly used by married couples to manage their household expenses. Still, some couples prefer a little bit of privacy from their partners by maintaining separate savings accounts.

But what is the best choice for your relationship? We weigh the benefits of having a joint account with your partner.

The benefits

1. Shared monthly commitments

With a joint account, you and your partner can easily manage your fixed spending and utility expenses. Both of you can contribute a portion of your salary to the joint account and use it to pay monthly commitments like the rent, mortgage, car payments, and insurance premiums.

A joint account with your spouse may also be useful if you want to figure out whether to file a joint assessment for your income taxes but there are other factors you need to look at before you decide to file your taxes separately or using joint assessment.

A joint account can make everything simpler, from balancing the bills at the end of the month, filing for joint income tax assessment, and being able to pay down outstanding dues more efficiently.

Read more here on how you can better manage your monthly commitments.

2. Emergencies

In case that either one of you is unable to manage their accounts, then a joint account will ensure that your partner will be able to access all the household finances. Your loved ones must have access to the family account, especially if you are the primary earner or sole breadwinner.

In the event of emergencies, the other partner can have immediate access to all the money with less hassle. This could also be achieved by sharing your PIN and online banking password, but it’s more convenient (and safer) to have a joint account.

3. Better spending habits

A joint account allows you and your partner to be transparent by understanding each other’s spending habits. Once you have paid your fixed and utility expenses, you can dish out a mutual allowance that you and your partner can spend. This is financially easier to manage because you and your partner acknowledge the common good first, rather than the individual needs.

For instance, you can set a mutual threshold with your partner, such as 100 MYR or 300 MYR allowance, then discuss any spending or expenses that occur over that amount. This gives you a better understanding of your total household expenses while allowing some individualism in the relationship.

However, with benefits, come drawbacks.

The drawbacks

1. Lack of privacy

It’s beneficial that you are sharing your household and non-essential expenses with someone you trust, but sometimes it can get a bit too much.

Since you are sharing a joint account, you may have to justify every purchase that you make, which could end up with one – or both – of you feeling a loss of independence or individuality.

2. Uncontrolled spending

There is the danger of one party in the household suddenly going on an uncontrolled spending spree: which could end up affecting everyone. This is due to both spouses having access to the same funds, and can therefore freely spend it all.

This could have an adverse effect on the monthly budget if one party lacks self-control and has a habit of overspending.

It’s advisable for couples to opt for a mixed solution: having a joint account for the shared expenses while maintaining a separate account for independent spending money and long-term savings goals.

Read the fine print

For couples who plan to open a joint account, you should both read the terms and conditions from the bank carefully as in the event of the death of one partner, the surviving spouse may not be able to access the money in the joint account.  It is best to get details from the bank and make plans on how to deal with this unforeseen event properly.

There are other types of situations where joint bank accounts are opened between parent and child, siblings and close family relations. Regardless of which type of joint account arrangement you choose to enter, make sure you read the fine print and understand the terms fully before you sign on the dotted line.

If a joint account is used correctly, it can add another layer of togetherness to your relationship while helping you to plan and spend more effectively.

This article was first published in June 2021 and has been updated for freshness, accuracy and comprehensiveness.