Ask Penny: I’m a newlywed — should my spouse and I get a joint bank account?

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In a Nutshell

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Hi Penny — I recently got married and am wondering if my spouse and I should open a joint bank account. Is it a good idea for our two accounts to become one? — Blissfully Wed

Hi, Blissfully Wed!

Congratulations on your recent nuptials! Getting married is exciting, though it can come with some big decisions. One of them, as you’ve learned, is whether to combine your finances if you haven’t already.

I’m hoping you and your new spouse have already had a few conversations about money (if not, there’s no better time than now). Topics might include your spending habits, what your budget will look like as a couple, your shared goals, who will be responsible for actually paying the bills each month and how much debt (or savings) each of you brings into the marriage.

A joint bank account can help make managing your money and paying bills as a couple easier, but there are some things to consider first.

How does a joint bank account work?

Joint bank accounts allow multiple account holders to deposit and withdraw money, as well as the ability to make changes to the account.

Joint bank account owners can each set up transfers, track account activity and (if applicable) write checks. They are also responsible for any fees that may be charged.

Although a joint bank account can be a great option for married couples, you don’t have to be married to have one. In fact, you can open a joint bank account with anyone you share finances with, whether it’s someone you’re dating, a roommate or even a parent or sibling.

Benefits of a joint bank account

Opening a joint bank account with your other half can give you both convenience and transparency.

Joint bank accounts can make paying household bills easier by allowing you both to track spending, savings and general cash flow. With a shared account, you each know where the money is going each month and have a pretty good idea of your overall financial picture as a family.

You’ll both also have access to household funds, rather than needing to transfer cash between your separate accounts.

Lastly, if you bank at an FDIC– or NCUA-insured institution, each account holder is covered up to the maximum limit of $250,000. This means that if you and your spouse have $500,000 in a joint account, each of you would be covered individually up to $250,000, making the entire balance insured.

Drawbacks of a joint bank account

Before you head to the bank to open a joint account, there are a few things to consider.

When you open a joint account with someone else, you’re sharing complete access to the funds in that account. If one person wants to spend a large sum of money or even transfer the entire balance out, they can. One account holder may even be able to close the account entirely without the other owner’s permission. Let that sink in for a moment.

If you have any hesitation about putting your money into someone else’s hands — even your spouse’s — you and your spouse may decide that the best solution is a blended approach. This way, you each keep separate accounts but put money for shared household expenses into a joint checking account each month. The bills — such as your mortgage or rent payment, utilities and groceries — can then get paid with those funds.

The account can also be used for joint purchases like items for your home. Alternatively, you might open a joint savings account for shared savings, like an emergency or vacation fund.

Whatever money is left over stays in your own individual accounts. This might include designated “fun money” for each of you or funds for individual expenses such as your own car loan or student loans.

Another thing to keep in mind is account limits. Depending on the financial institution — and even the specific type of account you choose — you will typically face dollar limits on ATM withdrawals, ACH transfers or other transactions for each day or each month. If you and your partner are both using the account frequently, this could potentially put you over that limit.

Be sure to look at how you each spend throughout the month in order to pick the right joint bank account.

How to open a joint bank account

Most financial institutions offer joint bank accounts, so you can open an account at most banks and credit unions.

The process is generally simple, and you can open an account either online or in person at most banks. You may need to provide your ID or driver’s license and personal information such as your name, Social Security number, address, date of birth and email address. You’ll also need to decide how to fund the account initially.

If desired, you can each set up direct deposits and/or automatic savings contributions. You can also schedule automatic bill payments once your account is up and running, so that you can stay on top of your joint finances and bills.

Decide if a joint bank account is right for you

The decision to open a joint account is a personal one that may work for you and your spouse — or may not (and that’s OK). Talk with your partner about the implications of sharing a joint checking, savings or even joint credit card account, and make sure you’re both in agreement on how the funds will and will not be used.

About the author: Penny is Credit Karma’s conversation maven. If you’re a Credit Karma member and have had a question about your financial situation, you might have chatted with Penny about it in the Credit Karma app. Now, Penny wants… Read more.