Welcome back to the Newton Federal blog archives! Today’s topic: Joint Bank Accounts, why or why shouldn’t you get one?
For those unfamiliar, a joint bank account is when you and another party agree to share a bank account. This means administrative rights to the account for both parties.
Is it a good idea to pool your resources together with another person like this? Newton Federal does a deep dive here for your review. Be sure to check out our previous entries as well, which are packed full with valuable, relevant information.
The Pros of Joint Bank Accounts
One of the main reasons to establish joint bank accounts with someone is if the two of you are paying towards the same monthly payments. Rather than the hassle of coordinating from separate accounts, some of your resources are pooled together to ease the burden. The option of setting up auto debits also extends to this approach.
Common Reasons to open a joint account:
The most common instance of a joint bank account is of course, with your spouse.
If you're opening an account for a minor, keeping both names on the account is a great way to get them used to having one, while also keeping an eye on their spending.
The Downside to Joint Accounts
As you may have already guessed, it takes a great deal trust to open a joint account with someone. At the end of the day, your partner will have as much control over the account is you. Be sure to only engage in something like this with someone who you trust dearly!
You want someone who won’t put their impulses above the overall goal of the account. The last thing you want is to have a goal in mind, only for one party dip into the reserve funds for selfish reasons. Or even, imagine waking up one morning with your accounts cleared and no legitimate means of restitution. Think ahead now, to save yourself from any strain later!
More than anything, having a joint bank account is hard work. You are both entitled to all the wins, as much as you are the losses, meaning both of you share equal responsibility for the account. Whether in the green or in overdraft, the responsibility falls back on both parties.
Getting on the same page here with your partner is critical for the success of your joint account. You should constantly be checking in with each other, taking time to survey, evaluate, and re-evaluate the progress of your account along the way. It won’t be easy, but if you find a system that works, it’s well beyond worth it!
Newton Federal Bank
Ready to get a head start on setting up your first or next account? Newton Federal is the partner you’re looking for! Our extensive service list is primed to add value to any of your banking needs. Have more questions for us? Head on over to our contact page to schedule a call today!