If you have a partner or significant other, there are many pros and cons that come with having a joint savings account, not least of which is maximising competitive interest rates to grow your savings pot. 

On this page, find out what a joint savings account is, how your money is protected, what your alternatives are and whether a joint savings account could be right for you.

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What is a joint savings account?

A joint savings account works in the same way to your individual savings account – the only difference being that two people have access. That means that either named party on the account can deposit or withdraw money.

Can I have a joint savings account?

Joint savings accounts are popular with couples and families who want to pool their funds, as they allow you to have more than one named holder on the account. As double the funds can mean more money in the account, this could mean earning a higher interest. 

Joint savings accounts can be a great way to pool financial resources if you’re saving for something with another person. This could be a house, a holiday, or even just a rainy day fund. If you live in shared housing, it can also be an easy and transparent way of splitting day to day costs. Joint savings accounts aren’t always the best option for day-to-day banking, but they can be a great way of getting one step closer to your shared financial goals.

You can open a joint savings account as long as you pass the usual criteria that banks and financial institutions ask for. Normally you have to be over 18 years of age and have a permanent address in the UK. Each bank has their own set of rules, so you may need to pass a simple ID check or credit score. Some banks will also require you to already have an account with them to open a joint savings account. 

Advantages of a joint savings account

So, what are the benefits of having a joint savings account with someone? We have outlined a few of the pluses that come with sharing access to your savings here:

  • If you are cohabiting, a joint account can make it easier to share bills, mortgage payments and other daily living expenses (although a joint current account may be a better option for sharing daily costs)
  • It can make saving for a joint venture (a wedding, holiday or house, for example) easier, quicker and more straightforward
  • You won’t have to worry about extra steps involved with transferring money to each other or any additional fees that may be involved in that process 
  • You may earn more interest as you are likely to have more money in the account than if you were saving solo
  • All your shared resources are right there in one place

Disadvantages of a joint savings account

Setting up a joint savings account should only be done only with people you fully trust and you should think about it carefully before committing. Here are some things to consider before you open a joint savings account:

  • Your co account holder can access funds in the savings account without your permission, as you both have equal access
  • If you part ways, it can be difficult to close the account unless you both agree to equally divide the balance. If there is a dispute, the account can be frozen until a solution is found
  • Your co account holder can see what you are spending money on so there is little privacy involved with purchasing
  • Opening a joint savings account may also link you financially with someone else. If they have a low credit score this could affect your own rating

Alternatives to a joint savings account

If a joint savings account doesn’t sound like the best solution for you, there are other options out there. If you’re in a partnership, you can both just have an individual savings account and transfer money back and forth. This saves the headache and worry of wondering what to do if things go wrong and keeps you fully in control of your own personal finances. You may also want to protect your credit score rather than be financially linked to someone else.

Another alternative could also be opening a convenience account. This is similar in some ways to having power of attorney over an account, and is often used in family situations when a family member is elderly or unwell. If you have a convenience account, you are still the sole owner but a named person can make transactions on your behalf. 

If inheritance is part of the reason for opening a joint savings account, you could also consider opening a POD account (payable on death). You simply let your bank know who will be the beneficiary of your account funds in the event of your death. This can be as simple as filling out a form at your bank.

Is your money protected in a joint savings account?

If your bank is regulated in the UK, up to £170,000 of your money is protected by the Financial Services Compensation Scheme (FSCS) in a joint account. This means you’ll be able to claim up to this amount in the unlikely event that your bank fails. It’s important to note that this limit is per banking group, so if you have more than this amount, it’s a good idea to spread your savings across different banking groups.

How do I open a joint savings account?

Each financial services provider has their own rules around opening a joint savings account. Generally, you will need to provide proof of identity and proof of address, unless you are setting up a joint account in the same bank as your current account. 

You may need to agree to a straightforward credit check and to fill in an application form as part of the process. You will also be asked to sign a mandate that outlines the rules and regulations for the account. 

Applying for Raisin account

You can quickly and easily open a savings account with competitive interest rates from a range of UK banks when you register for a Raisin UK Account

Accounts are free to open, and once you’re approved, you just need to make your deposit and watch your savings grow.

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