Joint savings accounts for couples: Everything you need to know

There’s a lot to consider when blending your life with your partner. Whether you’re moving in together or officially tying the knot, some of the most important decisions are around how—or if—to combine your finances. 

One important topic: Should you open a joint savings account?

A joint savings account can be a great way to work together on your financial goals—but there’s a lot to know before making the leap. Read on to learn more about opening a joint savings account with your partner.

What is a joint bank account?

A joint bank account is shared by two or more individuals. It can be a joint savings account or a joint checking account.

Joint accounts function just like typical bank accounts. The primary difference is that both account holders (you and your partner) have full access to the account and have equal ownership of the funds. 

If you’re considering a joint account, you might first want to learn more about what to consider before combining finances with your partner.

How does a joint savings account work?

With a shared savings account, both account holders have equal power over the account. That means you and your partner can both deposit and withdraw funds. And you’ll both be able to see all account activity. 

With a joint account, there is no difference between the funds you or your partner contribute—they all go into one shared pool of funds. Both account holders can withdraw or spend from the pool, even if they weren’t the contributor.

Pros and cons of a joint savings account for couples

As with all financial decisions, there are potential pros and cons you’ll want to consider. One major advantage of joint accounts is that they may actually strengthen your relationship, according to a recent study, “Common Cents: Bank Account Structure and Couples’ Relationship Dynamics,” by Jenny Olson, Ph.D., an assistant professor of marketing at Indiana University.

“Couples with joint accounts were significantly better off than couples with separate accounts,” says Olson. “While relationship quality tends to decline over time, on average, we found that couples randomly assigned to merge their finances were buffered against that decline.”

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Benefits of a joint bank account

“A joint bank account is associated with greater financial goal alignment,” says Olson. “It promotes a more communal view of your marriage. You’re accessing the same pool of shared resources, so you need to work together when managing those resources. You tend to be more on the same page.”

Here are just a few other notable advantages of a joint account:

• Convenience: One of the biggest perks of a joint account is having a shared pool of assets, which can streamline how you save and spend as a couple—no more worrying about paying each other back or keeping track of who contributes what. 
• Openness: With a shared account, you and your partner have a new window into the other’s financial situation and decision making. This transparency can help promote honest and open conversations about finances. “It facilitates communication and transparency, two benefits we know are good for marriage,” says Olson.
• Helps you work on shared goals: A critical part of a relationship is sharing common goals, whether that’s traveling the world or saving for a house. No matter your objectives, a joint account can help you align your short- and long-term financial goals.
• More savings: A shared account can help increase your saving power by combining your assets. And if you have an interest-bearing joint account, you can take advantage of the power of compound interest and earn even more over time, thanks to a typically higher balance.

Potential disadvantages of a joint bank account

While there are plenty of good reasons for opening a joint savings account, there are also potential pitfalls you’ll need to understand and consider: 

• Possibly too much transparency: When you open a joint savings account, you’ll sacrifice a level of financial privacy that you would have had with a solo savings account. 
• All contributions are subject to creditors: If your partner is having financial troubles, your contributions to the shared account could be used by creditors to pay off any debts.
• A breakup could be even more messy: Ending a relationship can be complicated, but intertwined finances can make things even more messy. Remember that if you split, your partner might be entitled to their share of the balance in your joint account.
• Money may be harder to track: Keeping track of the exact amount of money going in or out of a joint account can be tricky if more than one person is making transactions. Therefore, effective communication is vital to keep accurate tabs on your balance and to avoid issues with spending and tracking expenses.

Considering all the factors before pooling your assets into a joint savings account is essential. You need to assess and understand your and your partner’s financial situations, your shared goals, and the state of your relationship.

“We’re not saying a joint bank account is the only option or best option for all couples,” says Olson. “There are important nuances. There are going to be some situations where choosing an account structure warrants a conversation. Take a step back and talk to your partner about what will be best for you and your unique financial circumstances.”

Still weighing your options? Learn more about the pros and cons of opening a joint account.

FAQs about joint savings accounts for couples

Question: Are joint savings accounts insured by the Federal Deposit Insurance Corporation (FDIC)?

Answer: Yes, joint savings accounts are FDIC-insured bank accounts, if the bank is FDIC-insured. Each account holder is insured up to $250,000 per depositor, per account ownership category, which means you and your partner will be insured for a total of $500,000 per account category, assuming you maintain joint ownership of the account. (If a couple has joint ownership of, for example, a money market account and a CD at the same institution, each deposit type may be insured up to $500,000, per the FDIC, for total coverage of $1,000,000.) 

Question: Can you open a joint savings account if you’re not married?

Answer: Yes, you can open a joint savings account regardless of your legal marital status. However, taxes on a joint account can get complicated for unmarried couples. Married couples can file together, but unmarried partners will need to file separately and might need to consult with a professional come tax time.

Question: Are joint savings accounts a good idea?

Answer: There’s no simple answer, but joint bank accounts have significant benefits. Check out the section below or speak with a financial advisor, if appropriate, to help determine whether a joint account is appropriate for your situation. 

Question: Who owns the money in a joint account?

Answer: In most situations, all of the money in a shared account belongs to all account holders equally. In other words, if you have a joint savings account with your partner, you both own all its funds, regardless of your individual contributions.

Question: What happens to a joint account if one account holder dies?

Answer: Typically, the surviving account holder becomes the sole owner of all the funds in a joint account. This is called automatic rights of survivorship. Per the FDIC, the account holder will continue receiving FDIC coverage for joint ownership up to $500,000 until six months after the death, providing time to distribute the funds to other insured accounts as needed. After the six-month period, the surviving account holder will only be insured up to $250,000 for that account.

Ready to get started? Learn more about how to open an online savings account.

Is a joint savings account right for you?

When it comes to financial decisions, nothing is one size fits all. So how do you decide whether a joint bank account is the right move for you and your partner? Here are some signs a shared savings account may benefit both of you.

• You live together and want to put money away for household expenses, like rent payments or home repairs. 
• You are saving for shared goals, like retirement, travel, or a child’s college fund. 
• You communicate openly and honestly about your spending and saving habits. 
• You understand each other’s financial background, and neither of you has unaddressed debts or other issues that might negatively affect a shared account.
• You already have a joint checking account and are looking for more ways to organize your financial life.

How to open a joint savings account

The process of opening a joint savings account for couples is similar to opening a savings account on your own.

If you are opening a new account, you can either visit a branch or apply online. You and your partner will need to complete an application that includes personal information for both account owners. 

If you want to add a co-owner to an existing account, you can fill out a joint owner authorization form and submit it by mail, fax, or through your online account. 

Are you and your partner ready to start using a joint savings account? The Discover^® Online Savings Account might be your perfect match, with a high annual percentage yield and no monthly fees or minimum deposit.

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This article is for informational purposes only and is not intended as a substitute for professional advice. For specific advice about your unique circumstances, you may wish to consult a qualified professional, at your expense.