1. Guides
  2. Banking & Saving
  3. What is a joint bank account?

What is a joint bank account?

Tamires Criscio
Tamires Criscio
  | Edited by Tom Church
Updated 1st November 2021

Do you want to learn more about a joint bank account? Latest Deals is here to help you understand how joint bank accounts work and to tell you more about their advantages and disadvantages.

What is a joint bank account?

A joint bank account is a type of bank account in the name of two or more people. 

Everyone named on the account can pay money in or take money out. 

In some cases, to be able to do these money transactions, all the people named need to agree to them. 

A joint bank account is commonly used by couples, married or not, and housemates to make it easier to manage shared finances. 

A joint bank account is not recommended for people that need to take care of someone's bank matters when they can't look after themselves. For that, there are other long-term solutions. Ask your bank what other options they can provide in these cases. 

How does a joint account work?

A joint bank account works pretty similarly to any other bank account. 

The main difference is that instead of one person being responsible for the account, the account can have two or more people responsible for it. 

In this case, each account holder can have access to a bank card. 

How to open a joint bank account

Image

The easiest way to open a joint bank account is online. The potential account holders must complete an application form. 

To open a joint bank account, all potential account holders need to be UK residents and at least 18 years old. 

Some banks will also require you to visit your local branch to bring documents such as proof of address and identity for all account holders. 

The most important thing about opening a joint bank account is to understand your rights and responsibilities, as your name will be attached to the other account holders, which can affect your credit score. 

Some of the things you need to look out for when opening a joint bank account are: 

  • If it's possible to take all the money out of the account without the others knowing or permitting. 
  • Who is responsible for paying back any overdrafts on the account. 
  • How to proceed if there is any problem with the account holders. 

When you open a joint bank account, all the account holders will need to sign a mandate. This document will inform you of all your rights and responsibilities. 

The mandate will also set out what account holders can do individually and what actions need their collective agreement.

You and the other account holders can choose how to deal with the day to day management of the account. For example, requiring approval of everyone before setting up a new regular payment or for withdrawals. 

Challenger banks offer joint bank accounts for regular account holders, and their processes are usually quicker. Still, make sure you are comfortable with how all account holders can use the account. Learn more about challenger banks here. 

IMPORTANT NOTE: Although you can easily set up a joint bank account online, it is better to do it in person by visiting your chosen bank's branch. This is because you will have the chance to ask questions and make sure you are comfortable with the account settings. Your money and your name will be attached to the other account holders, so the more careful you are, the better. 

Can a joint bank account affect your credit score?

The most important thing to consider when opening a joint bank account is that this can affect your credit score. 

When you open a joint bank account, your financial history is linked with the other account holders.

That means that if the other account holders have a poor credit score, your credit score may be affected as well, even if everyone is using the joint bank account responsibly. 

After opening a joint bank account, for as long as it is active, every time your credit score is checked, they will also check the credit score of the names financially linked to you. 

Another important point is to try and avoid overdrafts because this is an easy way to get into debt if not used responsibly.

Which bank is best for a joint bank account? What is the best joint bank account?

There isn't an exact answer to this question because it will depend on your needs and circumstances. 

The great news is that the banking industry in the UK is very competitive, so you have many options when it comes to which bank is best for a joint bank account. 

The biggest four banks in the UK are Barclays, Lloyds, HSBC and NatWest. But there are other banks such as TSB, Halifax, Santander, Metro Bank, Co-operative Bank, Bank of Scotland and Nationwide.

Below you will find a list of some of the most popular banks in the UK, their contact information and a link to their joint bank accounts options: 

Bank’s Name Bank’s InformationJoint Bank Account Option 
Halifax Website: https://www.halifax.co.uk/
Phone Number: 0345 720 3040
Joint Accounts
BarclaysWebsite: https://www.barclays.co.uk/
Phone Number: 0345 734 5345
Joint Bank Accounts
NatwestWebsite: https://www.natwest.com
Phone Number: 0345 788 8444 (London)
Joint Bank Accounts
HSBCWebsite: https://www.hsbc.co.uk
Phone Number: 0345 740 4404
Joint Current Accounts
Lloyds Bank Website: https://www.lloydsbank.com
Phone Number: 0345 300 0000
Joint Accounts
Metro BankWebsite:https://www.metrobankonline.co.uk
Phone Number: 0345 080 8500
Joint Current Account (This bank doesn’t open joint bank accounts online, you will need to open it in person.)
SantanderWebsite: https://www.santander.co.uk
Phone Number: 0800 912 3123
Joint Bank Accounts
TSBWebsite: https://www.tsb.co.uk
Phone Number:020 3284 1575
Joint Current Accounts
Co-operative BankWebsite:https://www.co-operativebank.co.uk
Phone Number:0345 721 2212
Joint Bank Account
Bank of ScotlandWebsite:https://www.bankofscotland.co.uk
Phone Number:0345 721 3141
Joint Accounts
NationwideWebsite: https://www.nationwide.co.uk
Phone Number:0345 730 2011
Joint Current Accounts

What are some of the advantages of a joint bank account?

Image

The most significant advantage of a joint bank account is the easy management of shared finances. 

If you live with someone else, a partner, a friend or a family member, a joint bank account can be an easy way to make sure all the payments are made correctly by setting up standing orders or Direct Debits for all the household bills. You can also use a shared bank card to make grocery shopping easier. 

This can avoid constant calculations about who owes what. It also makes living together easier. The two or more parties just need to transfer money into the account, and everything else can be done automatically. 

If you plan to open a joint savings account, this could earn you more interest, as you are likely to have more money there with two or more people saving in the same account. Learn more about savings accounts here. 

What are some of the disadvantages of a joint bank account?

Image

The most significant disadvantage of a joint bank account is giving other people access to your money. Still, as long as you are comfortable with how easily the other account holders can access it, you should be fine. 

That's why it's so important to use the written mandate as a form of protection. This document will tell how the account can be used, and there are ways to protect your money, including the most important one: approvals for withdrawals. 

Lastly, the best way to use a joint bank account is to pay for common expenses and for that, you only really need to be able to set up standing orders or Direct Debits.

Other disadvantages: 

  • Your credit score can be affected by the other account holders' credit scores. 
  • Depending on how you are using the account, you might lose privacy, as the other account holders will know how you are spending your money. 
  • If money is taken out of the account by any account holders, there is nothing you can do about it. (That's why it may be important to set up a control for this, with everyone approving withdrawals and having it written on the mandate.)
  • If there is any outstanding debt, all the account holders are fully responsible for it. (This could mean that you would be paying for other people's debts). 
  • All account holders have the same ownership over the money. (The bank doesn't care who is depositing the money, as long as it's in the account, everyone named in the account has the right to it.)

How to freeze a joint bank account 

The best way to handle disagreements with other account holders is by freezing the account.

To freeze a joint bank account, you will need to cancel the mandate. All the account holders have the right to cancel the mandate at any time. 

This means that no one, including you, will be able to withdraw money or manage the account until further notice. 

IMPORTANT NOTE: To unfreeze the account, a written note signed by all account holders must be provided or, in some cases, only court orders can unfreeze the account. 

How to close a joint bank account

The first thing you need to do to close a joint bank account is to decide what will happen to any direct debits or standing orders on the account. They either need to be cancelled or moved to another account. 

In addition, if there is an overdraft, this must be paid in full before closing the account. And all account holders are responsible for this payment. It's important to note that your money might be transferred to cover the debt if you have a personal account with the same bank provider. 

Then, when these two things are resolved, all the account holders need to agree in writing that they want to close the account and how the money left (if there is any money left) will be split. 

You can also have the option to remove any account holder name from the account and use it as a regular bank account. To remove any names, all the account holders also need to agree in writing. 

After closing a joint bank account, make sure you contact all three credit reference agencies — Experian, Equifax and TransUnion in the UK to issue a notice of disassociation so that you are no longer financially linked to the other person. 

If any parties can't agree on the account closure, you'll need to cancel the joint account mandate, also known as freezing a joint bank account. This will mean that neither of you can use the account until you've reached an agreement. 

What happens if you need to divide the money held in a joint bank account?

To divide the money held in a joint bank account, all the account holders must agree in writing on how the split should work. 

If all parties agree, the process is easy, and the money is transferred accordingly to the private bank accounts in a few days. 

If there isn't an agreement, the joint bank account will be frozen, and nobody will be able to access it until an agreement is reached. This usually means that the case could go to court, and only a court decision can unfreeze the account. 

FAQ 

Image
What do you think of this?
We use cookies (e.g. personalisation, analytics, social media). Find out more.