What is a joint savings account, and should I get one?

Couple sitting together in their kitchen, smiling and discussing opening a joint savings account Image: Couple sitting together in their kitchen, smiling and discussing opening a joint savings account

In a Nutshell

A joint savings account is a bank account shared by two or more individuals. A savings account can be a good way to help you manage your savings — and a joint savings account can also help to potentially streamline your financial planning with another person. But you should carefully consider who you’d like to open an account with, because you’ll both have equal access to the money.

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A joint savings account can make it simpler to manage finances with another person. But you should only open one after defining its purpose and establishing clear rules with people you trust.

Savings accounts are a common type of bank account. A joint savings account is owned by two or more people.

A joint savings account may make it easier for multiple people to manage their finances together. It can also allow an individual co-owner to have more money insured at one institution than they would with a savings account on their own.

We’ll go over the potential benefits of joint savings accounts in more detail and some things to consider before you open one.

How do joint savings accounts work?

A joint savings account is similar to an individual savings account, except that two or more people co-own the bank account. And just like an individual savings account, a joint savings account may offer the account owners an interest rate on their deposits, typically with compounding interest. This is called your annual percentage yield, or APY.

How to open a joint savings account

Opening a joint savings account is similar to opening an individual savings account.

First, you’ll need to decide which bank, credit union or online bank you want to open an account with and see if it offers a joint savings account.

If neither of you has an account with the financial institution you’ve chosen, you can probably apply together by selecting the “joint account” option in the application, either online or at a physical branch.

If you already have an account, you may be able to add others as joint account holders at your existing financial institution. But you might have to go into a branch to do that.

Here’s the type of personal information you may be expected to submit when opening a new joint savings account.

  • Social Security number
  • Valid ID
  • Date of birth
  • Phone number
  • Email address
  • Proof of physical address
  • Bank account or debit card information for funding your new account

Who has access to the joint savings account?

Everyone on the account has the same access to the joint savings account. In other words, any account holder can withdraw from the joint account without the other person’s permission.

What are the benefits of a joint savings account?

A joint savings account can be helpful for those who want to manage shared finances or work toward shared financial goals with a person they trust.

A joint savings account also allows for greater transparency because both deposits and expenses withdrawn from that account can be viewed by all account holders. And it’s important to note that anyone listed on the account has equal access to the funds in it.

It may also provide better financial protection, since the Federal Deposit Insurance Corporation, or FDIC, typically insures a higher amount for a joint savings account than it would for an individual savings account. For an individual account, the FDIC insures a single person at the same bank up to $250,000 for a single account type.

But for a joint savings account with two co-owners, the FDIC would insure a maximum of $500,000 on that joint account, minus any amounts held by either of the co-owners across other FDIC-insured accounts at the same bank.

Who can I open a joint savings account with?

Generally, you can open a joint savings account with anyone. But just because you can doesn’t mean you should.

Since a joint account allows anyone with ownership to withdraw funds from the account without another account holder’s permission, it’s important to have a clear purpose for the account — and the funds in it. It’s also important to open this type of account with someone you trust.

Joint savings accounts can make sense for partners or married couples who manage shared expenses. And parents may find a joint account with a child a useful tool to teach them about finances.

Tips for opening a joint savings account

Before opening a joint savings account, you should make sure you trust the people who will co-own the account, define the account’s purpose, and establish other clear rules around how and when to use the account.

You and any co-owners should discuss and agree on the purpose of the bank account — whether it’s to save for a specific expense, pay for shared costs or something else.

After setting a clear purpose, you should also discuss rules for using the account. Here are some questions to ask.

  • How often and how much will each person contribute to the joint account?
  • When can someone withdraw from the joint savings account?
  • What’s the maximum amount each person can withdraw per month?
  • What’s the maximum limit a person can withdraw without informing the other account holders?
  • What happens if a person doesn’t follow the rules?

What’s next?

A joint savings account can be a convenient way for multiple people to manage finances together. But you should only do so in certain situations. If you’re not sure if a joint savings account is for you, ask yourself these questions before opening a shared savings account.

  • Do you trust the people who you want to open the joint account with?
  • Have you and your co-owners agreed on the purpose of this joint account?
  • Have you set the rules on how to use the bank account?
  • Do you want to open a new joint account or add others to your existing savings account?