Joint bank accounts – the risks and what to do


Sharing your life with someone you love is probably one of the most exciting feelings one can experience in life. Love means sharing – time, adventures, happy moments and not so sunny days together. 

Should you share everything? No. There are things in life that you shouldn’t share even though you love your partner with all your strength. One of those things is only owning a joint bank account with your spouse. A joint account should be an option and not the rule. 

What is a joint account?

Safe deposit box
Source: Pixabay

A joint account is a bank account where two or more people administer the same bank account, hence joint. The degree of power given to the users of a joint account may vary from having one signature or approval to having two or more signatures to release funds from the account. A joint bank account is quite common in companies and other organizations, usually to control the outflow of funds, such as when issuing cheques and effecting bank transfers.

Joint accounts are common among couples, too, as it involves an element of sharing, which is what love is all about. 

In the case of organizations, joint accounts are for control purposes, whose benefits may translate into disadvantages for couples. Organizations such as limited liability companies own joint bank accounts and not the individuals authorized to manage the account. The risk is negligible. On the other hand, couples who administer their joint bank accounts are the same people who own them, and the risks are higher.


Abandoned fishing boat
Source: Pixabay

Never depend on having only a joint bank account where at least one spouse deposits their income directly or holds significant amounts. While joint accounts may be ideal for organizations, this can be a high risk for couples.

Honeymoon periods pass, relationships can grow dull, and any possibility can become a reality. The risks associated with owning only a joint account are high.

The demise of a spouse

Death is a painful experience. Young and old, no one can escape it. One of the pitfalls of only owning a joint bank account is when a spouse dies. Usually, banks freeze their clients’ accounts upon their death. If you only have a joint account, you won’t have access to your bank account. You can’t withdraw any money. Besides dealing with the trauma of losing a loved one, you won’t be able to buy food, pay utilities and end up deeper in a dark and desperate place. Banks aren’t known for their efficiency, and this means that it could take months or years until you can regain access to the joint account.

Court orders

Courts may issue warrants to force banks to freeze their clients’ bank accounts. Reasons for freezes can include illicit activities like proceeds of crimes to less serious matters like one party suing another due to a breach of contract.

If a court decides to freeze a bank account of one of the spouses, this may put the other partner in financial distress, especially if they have only a joint account.

Sometimes banks freeze clients’ bank accounts unintentionally due to human error.

Failed relationship

Some relationships last forever. Others don’t. Whether a relationship survives, only owning a joint account is a risk. The risks increase further if the relationship ends and one person decides to withdraw all the money from the joint account into their account. It may prove problematic, and the process can be lengthy and expensive for the partner who suffered the theft to get their money. Recovering misappropriated money from the malign spouse may involve police, courts and lawyers. Again, the process can take months and years to rectify the situation. 

Phishing and fraudulent eCommerce websites

Some couples may opt to have a debit card associated with a joint account. Cards are physically in shops by swiping them in a POS (Point of Sale) and online on eCommerce websites like Amazon, eBay, etc.

When buying online, someone may inadvertently be scammed by buying from a fraudulent website. Electronic devices like mobiles and laptops can be infected by spyware transmitting personal data like card details to third parties that can withdraw money from your bank account without authorization.

Once you realize that you notice strange transactions, your first instinct would be to call the bank. Banks try to do damage control and prevent more money from leaving your bank account by cancelling their cards associated with that account.

If the cards are associated with the joint account, banks will automatically cancel all the cards and have to reissue new ones. Banks can take a few days to issue new ones. It can be an inconvenience until the new cards arrive. 

Tips to reduce risks

Value and power
Source: Pixabay

You and your partner should never have only a joint bank account. You and your partner should each have your bank account, and a joint account should be optional.

Money earned from your source of income, such as your salary, should be deposited into your bank own bank account. Alternatively, if you opt to have a joint bank account, you should transfer money from your bank account to your joint account, and not the other way round.

Keep the least money possible in joint bank accounts. You’ll be limiting your risks in case of unfortunate events.

Owning a joint account with different banks doesn’t solve the risks. However, owning a personal bank account with different banks is a good strategy. 

Ignorance is not an excuse. There’s nothing complicated in having your bank account and managing your finances.

You can create your free bank account with Revolut in a few minutes. Click here to create one.


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