How to open a joint bank account
A joint bank account can come in handy when two or more people want to share access to money to pay bills, combine income, or simply provide easy access to funds for more than one individual.
Before applying with another person, however, you should agree on the account’s purpose and how you’ll use it. You also need to choose the right account type and gather the relevant application information needed to apply for each co-owner.
You’ll also want to understand what joint ownership means for accessing your money, and how Federal Deposit Insurance Corp. (FDIC) insurance applies to shared accounts.
Here’s what to think about before opening a joint account, along with the steps to take to get started.
Decide whether a joint account fits the way you will use the money
Your life stage may play a significant role in determining when to consider a joint account, but there are many circumstances that could merit opening one. The more important consideration is how you intend to use your money.
Choose the account’s purpose
Joint accounts can make sense for shared household bills or savings goals. Perhaps you need a fund for shared caregiving responsibilities or as an emergency fund.
Depending on the account’s purpose and how frequently you expect to make transactions, you can choose whether a checking or savings account will better meet your needs.
In any case, be aware that account co-owners can generally withdraw money independently, even if they didn’t contribute those funds. Therefore, you should only open a joint account with someone you fully trust.
Decide whether to keep individual accounts, too
Opening a joint account doesn’t automatically mean you need to abandon individual accounts. You could decide that the joint account is for your shared household bills, for instance, but maintain individual accounts for your personal expenses or other targeted savings.
Some married couples, for example, use the “yours, mine and ours” approach that includes joint accounts for shared expenses and individual accounts for personal expenses.
How to open a joint bank account step by step
Once you’ve established your reasons for opening a joint account, you’re ready to begin the application process.
Step 1: Compare accounts before you apply
Account terms and conditions differ widely across banks and sometimes among banking products at the same institution. Once you’ve decided what type of account will best meet your needs, compare your options.
Look at fees, minimum opening deposit requirements and ongoing minimum balances, interest rates or APYs (if relevant), branch and ATM access, digital tools, overdraft terms and whether you can complete a joint application online.
Step 2: Gather both owners’ information
Federal Customer Identification Program (CIP) rules generally require banks to collect each account owner’s name, address, date of birth, and taxpayer identification number (typically a Social Security number). Your bank may also ask for a driver’s license, passport, or other documentation to verify your identity.
Step 3: Apply, fund, and set up access
During the application process, make sure both owners are listed correctly and review how the account will be titled and accessed.
Once your application is approved, make the opening deposit if the institution requires one. Then set up online banking and digital alerts and consider whether you want a debit card or paper checks, as applicable.
You may also want to update your bill pay and direct deposit information after confirming the new account is active and ready to use.
Understand shared access and FDIC coverage before you deposit large balances
Before depositing money into your new account, it’s important to understand each owner’s rights to the funds as well as whether your money is protected by FDIC insurance.
What joint ownership means for access
Joint accounts generally allow all account owners to withdraw funds independently, regardless of who deposited the funds. In fact, to qualify for FDIC coverage under the joint-account category, all co-owners must have equal withdrawal rights.
How deposit insurance applies to qualifying joint accounts
For qualifying joint accounts, the FDIC insures each co-owner’s combined interests in all joint accounts at the same FDIC-insured bank for up to $250,000. That means a joint account with two owners could have up to $500,000 of coverage.
For example, if you and your spouse have a joint checking account with $50,000 and a joint savings account with $300,000, the combined $350,000 balance would be fully insured, assuming neither of you have other joint accounts at the same institution. Keep in mind that naming beneficiaries on a joint account places it under the FDIC’s trust-account insurance category, which follows different coverage rules.
Individual accounts are considered separately from qualifying joint accounts, so holding both types at the same bank could increase your overall FDIC coverage.
Set ground rules for how both owners will use the account
Before you begin using your new joint account, agree on how you’ll manage the money together.
Agree on contributions and spending
The account’s purpose is a good starting point for deciding how each account owner will contribute to and spend from the account. For example, spouses setting up a joint account for household expenses could funnel all income directly into that account before transferring money to individual or joint savings accounts. If it’s a joint savings account, perhaps each owner agrees to deposit a certain percentage of their income regularly.
When it comes to spending, discuss how you’ll use debit cards or checks and consider whether purchases above a certain amount require a conversation with your account co-owner.
Use alerts and account reviews to stay connected
Shared access to the account doesn’t necessarily mean shared monitoring. It’s worth deciding who will review statements, monitor recurring bills and suspicious activity, and keep account info up to date.
It may also help to set up transaction and low-balance alerts, if available, and discuss your bank’s overdraft options together.
All owners should remain aware of the account’s activity even if one person takes primary responsibility for monitoring the account.
Frequently asked questions
Yes, many banks allow you to open a joint bank account online, though application rules and processes vary by institution.
Yes. Banks generally allow unmarried couples to open joint accounts if both applicants meet the eligibility and identification requirements set by the bank. You don’t need to be married to share a bank account.
Not necessarily. All owners of the account will need to provide required identification information, but some banks allow applicants to complete their portions of the process online or at different times.
Yes, some banks allow you to add someone to an existing account instead of opening a new joint account. Check with your financial institution for its rules and process.
