Joint Bank Accounts: What They Are and How to Open One

Joint bank accounts offer a convenient way for two or more people to pool their money in one place. This makes managing household funds much easier, but it can also have some serious drawbacks if you choose the wrong person to share an account with.

Here's what you need to know to decide whether a joint bank account is right for you, as well as how to open a joint bank account.

A joint bank account is a bank account that's owned equally by two or more people. We often think of married couples who open a joint checking account or savings account, but this isn't the only way people use joint accounts. Some other examples of common use cases include:

• A parent who opens a joint account with their teen to monitor their spending
• An adult child who becomes joint owner of their aging parent's account to help them manage their finances
• Business partners who open a joint business bank account so each has access to the company's funds

Pretty much anyone can open a joint bank account. You don't have to be related. And you don't have to stop at two people either. Three or more people can share a joint bank account if they want.

Joint bank accounts work exactly the same as sole bank accounts of the same type. The only difference is that all owners of the accounts can access the funds. So, for example, checking accounts enable all joint owners (account holders) to write checks and pay bills from the account and get a debit card to withdraw funds. And any account holder of a joint savings account can withdraw the funds at any time.

Joint money market accounts and certificate of deposit (CD) accounts are also possible, though these are less common. They also work the same as money market accounts and CDs owned by a single person.

A joint bank account can make managing finances much easier, especially for couples, compared to transferring funds between individual accounts. All of the money is readily available for both to access as needed.

Opening a joint account also raises the FDIC insurance on that account. Normally, the FDIC insures your money up to $250,000 per account type per bank. But for joint accounts, it insures you up to $250,000 per depositor. So if a married couple opens a joint savings account, it's insured up to $500,000. That's a huge plus for those with large balances.

Since joint accounts give all parties equal access, it's crucial you choose your partners carefully. If you open a checking account online with your spouse, and they later drain the account, there isn't anything you can do about it.

You should only open a joint bank account with someone you trust completely. If you have any doubts about how they'll handle the money, make sure you lay out the ground rules before you open the account. Or don't open a joint bank account with them at all.

Another drawback is that joint bank accounts also don't allow for any privacy. Both parties can see all of the account's transactions. This can make it tricky if one person is trying to surprise the other with a gift. That's why some couples prefer to have a joint account for everyday expenses, but maintain separate accounts they can use for individual purchases or gifts.

Opening a joint bank account is similar to opening a solo bank account, except you'll need to provide personal information for all the co-owners of the account. This includes each person's:

• Full legal name
• Birth date
• Address
• Phone number
• Email
• Social Security number

Most banks will require some form of government-issued identification, like a driver's license or a passport, from each person, and some also ask for a utility bill or another proof of address. Check with your bank to find out exactly what documents you'll need to apply.

If the account you're opening has a minimum opening deposit requirement, you must also have some money ready to deposit when you open the account. Talk with the person you're opening the account with to decide how much each of you will contribute.

Most banks enable you to open a joint bank account online, but if you choose a brick-and-mortar institution, you can also visit your local bank branch and do so there. Follow the steps below:

1. Choose the right bank and bank account. Talk with your partner about what type of bank account you're interested in opening and agree on a bank to work with. Don't forget to consider account fees, access to funds, online and mobile banking tools, and customer service when deciding which bank is right for you.
2. Gather your documents together. Check with the bank to see what documents and information it requires and get this ready.
3. Fill out the online application or make an appointment at a bank branch. Select the "joint account" option and provide all necessary information to open the account.
4. Fund the account. You can transfer money electronically or via wire transfer from another bank account. Some banks may also enable you to deposit a check or cash.

Once you've completed the steps above, you and your partner should be able to use the account just like any other bank account. Both people can set up direct deposit to the account and create online accounts where they can view their balance and pay bills. If the account allows for it, each person can order checks and a debit card for making withdrawals.

To find an account that's right for you, check out our Best Banks for Joint Accounts.