How to find the best joint bank accounts for couples, housemates or business partners
A joint bank account can be a convenient way to track your spending, whether you live with flatmates, your partner or if you're about to start a business.
But opening one is not a decision you should take lightly, as it could affect your credit score and financially bind you to someone. Here's what you need to know.
What is a joint bank account?
A joint bank account is one you share with at least one other person.
This can be your partner or spouse but you might also want to share it with your flatmates and business partners to manage your expenses.
For example, joint banking could make it easier to pay your bills, your rent or mortgage or budget for food bills.
What are the risks of joint bank accounts?
Sadly, the convenience of a joint account also comes at a price. Joint accounts create a financial link between you and any other account holders.
All transactions will be able to be viewed by all account holders, so you'll lose your privacy. You'll also be jointly responsible for any debt on the account.
What are the risks of joint bank accounts
HERE are the main setbacks to consider before opening an account with a friend, business or life partner
- Opening a joint account links people financially, meaning it could affect your credit rating. If the other account holder has a low credit score it could potentially damage yours.
- If your joint account becomes overdrawn by one of the holders, each person is liable for repaying the debt.
- All transaction will be able to be viewed by all account holder, so you'll lose your privacy.
- If one of the account holder takes cash from the account without your knowledge, you won't be able to get it back - so make sure you trust the person you open the account with.
This means that if the account becomes overdrawn, each account holder is responsible for money owed - so you could end up liable for repaying someone else's debt.
And if you share a bank account with someone who has a poor credit history it could make it more difficult for you to get credit, even in your own name.
Hannah Maundrell, the editor-in-chief of Money.co.uk, told the Sun Online: "Getting a joint bank account can make it easier to manage your expenses like paying utility bills and prevent arguments about money.
"However, if one of you has a poor credit history you will be 'co-scored'.
"Make sure you trust anyone you open a joint account with. If one of the account holders takes money out without your consent, there aren't many options for you to get it back.
What you need to know about opening a joint bank account
Applying for a joint bank account is very similar to opening a single account.
As with opening a standard bank account, you'll need to speak to your bank directly, arrange what documents you'll need to sign, and what proof of ID you'll need to open the account.
Usually each joint-account holder must sign a document called a mandate which sets out how the account will be set-up.
More about banking
Most joint accounts are operated on an "either-to-sign" basis where each account holder can give payment and withdrawal instructions independently.
Some banks only let you open a joint account with one other person, but most will let you have four or more people named on it.
What are the best joint accounts for flatmates, couples and business partners?
We've teamed up with Moneyfacts to find the best deals for you.
Best for flatmates
Best for paying bills
Having a joint account makes it much easier for housemates, couples or business partners to manage their bills.
If you prefer to keep your finances private, you can set up a joint account just for the bills keeping a separate bank account for your personal spending.
- Santander 123 Lite Current Account -
If you want to open a joint account for practical reasons like sharing rent or household bills the is a good choice.
The account pays up to three per cent cashback on certain bills paid by direct debit like spending on mobile and paid-for TV packages.
You can get also get one per cent cashback on water bills and council tax.
To be eligible you'll need to deposit at least £500 a month and have two direct debits set up.
- Natwest Reward Account -
The Natwest Reward account let's you earn up to two per cent cashback on different types of bills including council tax, gas and broadband.
New customers and existing customers who switch their current account online will also get £100 reward if they switch before June 15.
The account will cost you £2 a month and you'll need a £1,500 deposit.
Best for cash rewards
Cashback accounts are great for anyone who is looking to get a little extra for the household spending, whether you're living with your partner or with housemates.
With many of these accounts charging a fee, anyone considering this option will need to weigh up the cashback received to the cost of the fee.
- Tesco Bank's current account-
The Tesco Bank Current Account will pay three per cent on balances up to £3,000 until April next year.
But it will also give you the opportunity to earn Clubcard points that you can then turn into cash.
As your debit card is also your Clubcard, for every £1 you spend on your debit card at Tesco, you'll collect 2 clubcard points.
To be eligible, you'll need to pay in at least £750 and pay at least three direct debit each statement month.
- Co-operative bank Everyday Rewards current account -
If you go for Co-op Bank's Everyday Rewards package you’ll earn an extra £5.50 every month for everyday use of your account or £66 a year.
The bank will pay you £4 a month if you pay in at least £800 a month and you stay in credit or within your agreed overdraft limit each month.
You will also need to log in to your mobile or online banking, pay out at least four direct debits each month and stay opted in to paperless statements.
Banking customers will then earn an extra 5p every time they use their debit card to pay - up to a maximum of £1.50 each month.
Best for couples
Best for high interest
With savings rates so low, more and more savers are looking elsewhere to get the best deal.
For couples with a savings goal in mind a high interest current account is one of the best places to get a high rate.
- Nationwide FlexDirect current account -
If you are looking to set up a joint account that will have a healthy balance then Nationwide’s FlexDirect could be the one you're looking for.
It pays five per cent interest on balances up to £2,500 for the first 12 months.
To be eligible you'll need pay in at least £1,000 a month into the account
It’s fee-free but you should switch after 12 months when the interest rate plummets to one per cent.
- Tesco Bank current account -
As mentionned above, Tesco Bank pays 3 per cent on balances up to £3,000.
It requires £750 to be paid into the account each month as well as three direct debits paid out.
- Halifax Reward Current Account -
The bank’s flagship free Reward Current Account pays £3 per month into your account as long as you deposit at least £750 per month and maintain two direct debits from the account.
Best for business partners
Best for free banking
As a sole trader, you have the option of using your own personal account or opening a separate business bank account.
But having your company's cash mixed up with your personal savings can be a headache when it comes to filing your annual tax returns or doing company accounts - so it might be worth opening a separate account to make things easier.
If you have set up as a limited company or partnership, you are required to have a business bank account.
Standard personal bank accounts are typically free of costs if you are in credit, but most business accounts charge per transaction on top of a monthly account fee.
But some providers waive fees for a specified period for new customers, so it's worth shopping around before settling for a provider.
- Yorkshire Bank current account - Business tariff -
New account holders with turnover of up to £2million can benefit from 25 months of free banking with Yorkshire Bank.
After the 25-month offer period, the account reverts to the regular business banking tariff, which costs £5 per month.
- HSBC Business Current Account - Small Business Tariff -
It offers 12 months of free banking, so there’s no maintenance fee or charges applicable to its standard tariff to pay.
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After the free period, accountholders move to a fixed price period, which costs £5.50 per month for 12 months.
In the fixed price year, you will be able to deposit a maximum of £3,000 in cash per month, with a charge of 50p per £100 levied after that.
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