Creating a Joint Bank Account, Yay or Nay?

Creating a Joint Bank Account, Yay or Nay?

As your relationship progresses, there comes an increased number of couple decisions – especially ones that are finances-related. Handling money matters as a couple can be tricky. For starters, do you combine your finances?

Traditionally, couples are known to do so—whether in a show of trust in each other or for better money management—in a joint bank account. But, what exactly is a joint bank account? 

Together with Joseph Tan, lead financial advisor of Joseph Tan and Associates, we delve deeper into the details of a joint bank account, to help you make an informed decision. 

Creating a Joint Bank Account, Yay or Nay?

A joint bank account is, as it names suggests, accessible by more than one person that has the authority to withdraw and deposit money without prior permission from the other. While creating a joint bank account may seem like the 'next step' for married couples, it doesn't necessarily have to be. Ideally, joint bank accounts should hold a purpose. While there can be various possible reasons, there are three common ones. 

The first reason is to ensure immediate access to an emergency fund. Emergency funds come in handy in unforeseen situations such as the loss of job, death or serious injuries. With an emergency fund, couples should aim to save up to at least 3 to 6 months of the family expenses. This way, neither will be left scrambling for financial backup in times of need. 

The second prevalent reason for a joint bank account is to dedicate it for family expenses. From inescapable bills to the fortnightly grocery runs, running a family requires proper financial planning. Depositing the amount for your family expenses into the joint bank account may possibly simplify the process of keeping track of your finances and of each others' contributions to the family as well. Your contribution to a joint bank account of this nature is largely dependent on your family's expenses. Some couples may choose to split the duty equally while others may opt to split the various bills instead. 

Creating a Joint Bank Account, Yay or Nay?

Finally, a joint bank account can also be utilised to achieve shared financial goals or milestones. This includes purchasing a car, a new home or even going on a holiday. When it comes to goal-achieving joint bank accounts, monthly contributions will differ according to the purpose and timeline. Hence, communication with each other to discuss and decide on a comfortable timeline and amount is crucial. 

However, joint bank accounts do come with some drawbacks. These include giving individuals a false sense of security as well as birthing possible insecurities and distrust between the couple. A false sense of security may occur if ample communication on the account's purpose isn't previously communicated. In such cases, either spouse may believe that he or she has more money than in actuality. On the other hand, others may constantly be in fear of facing an emptied account. 

Before creating your joint bank account, keep in mind both the monetary advantages as well as various concerns and demands that it requires. At the same time, remember to keep your finances and financial goals as a couple in mind as well. It is crucial that both your spouse and you are on the same page when taking the step to share an account. For more information on joint bank accounts and financial planning, reach out to Joseph Tan and Associates for professional financial advisors at or 6572 6729.

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Financial Services Manager, Joseph Tan and Associates

51 Scotts Road #03-11 Singapore 228241.
9853 0208 / 6572 6967

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