The rules for opening a joint bank account

HASTY couples are rushing into merging their finances but experts warn they should set some ground rules first.

While it’s not uncommon for people to mix money and romance, a new analysis by Bankwest found two in five people opened a joint account within just 12 months of hooking up.

Often a trigger for merging money is when they move in together or become engaged, allowing them to share joint responsibility of bills and savings goals.

But, on the flip side, the data found many couples took a more considered approach: one in two waited until they tied the knot before opening a joint bank account.

Bankwest’s executive general manager of customer solutions and insights, Pieter Vorster, said “people often need joint accounts when they have a joint goal”.

“Whether that goal is joint expenses, such as a joint mortgage, or having goals, it’s a perfect storm to adopt joint accounts,” he said. “These days if somebody spends money you can get a notification on your phone or via email and you can also get notified if you are below your minimum balance.”

Mr Vorster said people could hold multiple accounts of their own while also sharing a joint account with their other half.

Joint bank accounts allow for full transparency of money coming in and out, and remove any chance of surprise spending from your partner.

Tribeca Financial chief executive officer Ryan Watson said he was a big supporter of couples having at least one joint account.

“It prompts discussion and transparency around money within a relationship,” he said. “However, both parties need to be on the same page when it comes to the rules of engagement around a joint bank account.” Bankwest found the number of customers with joint bank accounts was rising, up from one in five transaction accounts in 2013 to one in three by 2018. Mr Watson warned if ground rules were not set from the beginning, “it can certainly lead to financial angst and animosity with a relationship”. “When setting up a joint bank account, what should and shouldn’t be paid for from the account must be made crystal clear,” he said. “Fair and equitable contribution is vitally important to the success of this endeavour.” Another big incentive to have a joint account is when a couple have a mortgage because they can use an offset account to help reduce the interest charges paid on a loan. Figures show for a couple with a $300,000 30-year mortgage, if they have $30,000 in their offset account – a daily transaction account linked to their home loan – they could save about $24,400 in interest charges over the life of the loan.