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Pros and Cons of Joint Checking Accounts

A joint bank account is a bank account held by two or more people. A joint bank checking account is a partnership for the purpose of depositing money, then writing checks. Checks are used like cash to pay creditors, purchase products and services, send money, or transfer money.

Co-owners of a joint checking account can be married couples, roommates, relatives, friends, etc. Many household bank accounts are joint checking accounts. Joint bank checking accounts work well for many people; however, these accounts have advantages, as well as disadvantages.

Advantages of Joint Bank Accounts

One advantage to a joint checking account is that all money is in one pot, so to speak. All the money is in one location instead of two separate locations. This is convenient for depositing money, writing checks, paying bills, and balancing the account.

Another advantage is ease of budgeting. If all co-owners of a joint bank account know how much money is being deposited in the account and how much money is used for paying bills, then they know how much money is required for expenses.

Both parties have access to deposit, withdrawal, or paying bills. This is handy because each person can perform individual functions at his or her convenience.

Disadvantages of a Shared Checking Account

One disadvantage of a joint checking account is that both participants have access to the bank account and either can withdraw or deposit without telling the other. An example of a problem would be with one co-owner withdrawing money from the account, creating an overdraft situation, which would incur costs for both parties.

Another disadvantage for participants in a joint checking account is a lack of privacy. For example, if one person is buying a gift for the other, the transaction can be viewed by the other due to the joint status.

If a problem arises in the relationship, it can affect the joint bank checking account. For example, one person can withdraw all the money from the account and leave a zero balance. This could have negative effects on the other person.

Feelings of resentment can arise if one participant contributes more money to the account, but is expected to pay the same amount for bills. Another problem may exist if one person resents the fact that the other person knows how and where he or she spends money. For example, a person who has had an individual or multiple bank accounts and then married, may not like the fact that the other person can monitor the activity of a joint bank account. Combining accounts or merging accounts may not be ideal, especially in this situation.

Joint checking accounts are not for everyone. Communication and trust are necessary for a joint account to work effectively. There are many advantages and disadvantages of joint checking accounts. Weighing whether it is advantageous to open a joint checking account is advisable before undertaking such an endeavor.