
10 tips to help you save money on your shopping trips
• 5 years agoAs inflation and import costs have risen, shoppers have been hit with bigger bills when… Read more »
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Although joint accounts have many benefits, there are some which do not view them favourably as they feel that they can be a big risk with your own finances. Though there are some safeguards in place entering into a joint account is a commitment and if you are unsure whether you can trust the person you will have the joint account with, it is worth withholding from opening the account.
A joint account can be used by two or more people who can pay money into the account, write cheques, withdraw money and pay bills. Couples who live together, married or not, and housemates are the ones who usually find a joint account to be the most beneficial for them.
It is simple to open a joint account, most banks and building societies offer them and they can usually be opened online or in branch dependent on the provider. The information you would need to open a joint account include name, date of birth, proof of ID and proof of address.
There are many benefits of joint accounts and as a result they work well for most people that set one up.
However, there are many reasons why a joint account may not be right for you or it may not work for you and your partner/housemate. Some of the downsides of a joint account could include:
In most cases, sharing a joint account with someone is an amicable experience however there are occasions when things start to turn sour, especially if a breakdown in a relationship comes along with it.
There are ways that you can deal with this though and you can protect yourself initially when you open the account. Ask your bank/building society about how to handle disagreements or the end of a relationship when you are applying for the account.
They are likely to suggest a formal agreement called a ‘mandate’ or ‘authority’ which all account holders should sign when opening the account. If you have problems with your fellow account holders, you can cancel the mandate but keep in mind that the other parties named on the account can also cancel the mandate.
This will freeze the account so no-one, including yourself, can access or withdraw money and the account will only be unlocked once all account holders agree how to split the money. However, if you cannot reach an agreement, it is likely the dispute will go to the courts for them to decide what to do with the money.
A joint credit card doesn’t technically exist, however if you and your partner are wanting to share a credit card there is a way you can do this. You or your partner can up a credit card account and request another card for the account which can be used by someone else. However, as credit card accounts can only exist in one name, if you open the account you are responsible for the balance, repayments and any debts.
As a result, sharing a credit card account with someone is not a good idea if you do not trust them with money as you have less protection personally and if your name is on the account, you are completely liable for the account regardless of who spends the money in the account.
If you are thinking about opening a joint account or you are worried about the account you already hold with someone else, you should get in touch with your bank, building society or Citizens Advice.