Joint Savings Account: Banking Guide

A joint savings account is owned by two people, allowing each party to deposit and withdraw funds. It can greatly simplify things for people who share their finances. However, there are a few things to keep in mind before opening a joint savings account.

If you are looking for ways to save more money or plan out your finances, a financial advisor can help you create a financial plan.

What Is a Joint Savings Account?

A joint savings account works largely the same as a traditional savings account. The main difference is there are two account owners instead of just one. Both co-owners have full access to the account and can deposit and withdraw cash without permission from the other account owner.

Joint savings can simplify things in some cases, such as for couples who are married or those in a domestic partnership who share expenses. If both parties have full-time incomes, they may be able to contribute to both ongoing expenses, as well as savings goals.

For instance, perhaps you and your partner are saving for a down payment on a house. If you have a joint savings account together, it will be easier to know if you are on track to meet your goal.

Benefits of Joint Savings Accounts

In addition to easier tracking for your savings goals, there are a few benefits of opening a joint savings account.

FDIC-insurance: The standard savings account has FDIC insurance of up to $250,000. However, since joint accounts have two owners, they are FDIC-insured up to $500,000. If either owner is already an accountholder at the bank where they are opening the joint account, those amounts are subtracted from the $500,000 total.
Account minimums: Some savings accounts might have minimum account balances, but with two incomes, it may be easier to reach any applicable minimums.
Better interest rates: Some joint savings accounts pay higher interest rates for higher balances.
Transparency: Joint savings accounts provide greater transparency regarding individual and joint spending habits.

Joint Savings Account Alternatives

A couple review their joint savings account.

While joint savings accounts have their benefits, they aren’t right for every couple. For example, it may not be a great fit if one partner has significant amounts of debt or if one partner has a much higher income than the other.

Whatever the reason, there are some scenarios where joint savings accounts may not be the best choice. In that case, these alternatives might be better options.

Shared Savings Goals

If you don’t want to combine all your savings, you could agree to have a joint account only for a specific savings goal. Maybe you are saving for your wedding, and you agree that you should both contribute. You may also feel that other savings goals, such as saving for a car that only one partner will drive, should be kept separate. In this case, you can open a separate savings account meant only for the savings goals you will share.

Separate Accounts

In some cases, it may simply not make sense to keep your savings commingled. Perhaps, you do not have shared savings goals, or each partner’s finances are radically different. In these cases, a joint savings account may not be ideal. However, situations and goals change. While it may be better to keep your savings separate until you are on the same page, you may be able to share an account in the future.

How to Open a Joint Savings Account

The process of opening a joint savings account may vary slightly by bank, but there’s some general information and documentation you may need to open an account.

Valid driver’s license or passport
Social Security number
Proof of address
Checking account or debit card details, such as account and routing numbers

You may decide to open an account online or physically visit a branch. If you opt for the latter, both parties should be present at the bank when opening the account.

If you want to use one of your existing savings accounts, adding the other person as an authorized user may be possible instead of opening a new account. Ultimately, the overall process will depend on the bank you choose.

What to Consider Before Opening a Joint Savings Account

Before opening a joint savings account, it’s important for both account holders to agree on how the account will be used. Discuss how much each person plans to contribute, what the money is being saved for and how withdrawals will be handled.

Since both parties have equal access, remember that one person can withdraw funds without the other’s approval. This makes open communication and shared expectations essential for avoiding misunderstandings.

You should also consider how a joint account fits into your broader financial picture. For example, combining funds may affect eligibility for income-based programs or financial aid. Additionally, if one account holder has significant debt or legal judgments, those funds could be at risk. It’s also important to think about how the account would be handled if the relationship changes, whether through separation, divorce or other life events.

Lastly, consider each person’s financial habits before opening a joint account. If one person tends to overspend or doesn’t track expenses carefully, it can create tension or lead to unplanned withdrawals. In some cases, it may be better to start with separate savings and consider a joint account later.

Being clear about goals, access and boundaries can help ensure the account serves both parties well.

Bottom Line

A couple discuss a joint savings account with their financial advisor.

A joint savings account is one with two account owners, allowing each to deposit and withdraw funds. This arrangement can simplify your finances and help you meet deposit minimums. However, it can also create problems when your finances don’t align with your partner’s. In this case, you may want to only share certain savings goals or keep your finances entirely separate for the time being. When you’re ready, opening a joint savings account should be almost as simple as opening one on your own.

Tips for Saving Money

A financial advisor can help you work through your banking needs and put together a plan that works for your unique situation. SmartAsset’s free tool matches you with financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you plan to open a brand-new savings account, be sure to check SmartAsset’s list of the best savings accounts. Some savings accounts are better than others; for example, some have no minimum deposit and have attractive interest rates.