One or two accounts?

The good and bad of joint accounts

When a couple joins financial forces, it’s typically so they can accomplish a joint savings goal or contribute to shared expenses, such as those that come from living together.

This is a typical step for married couples, but more unmarried couples are taking the plunge to combine households.

One way to streamline shared expenses is to open a joint bank account. If you’re considering opening a joint account, you’ll want to think about the pros and cons of that option.

1 Benefits of using a joint account

Joint accounts can be useful for managing regular expenses as well as longer-term financial goals. Lay ground rules together for how much you each plan to contribute, how you’re going to use the funds in the account and what you’ll do if your relationship ends.

Taylor Kovar, a certified financial planner and CEO of TheMoneyCouple.com, says unmarried couples should be very careful about opening a joint account. There aren’t as many legal protections as there are for married couples, who have inherent legal co-ownership of assets that the couple acquired after they got married. He says that there’s safety in keeping your own accounts and then opening a separate joint account that you and your partner both contribute to.

2 Drawbacks of using a joint account

The primary drawback of a joint account is dealing what to do if you break up.

The simplest way to handle a joint account post-breakup, Kovar says, is simply to split the funds in half. But if one partner contributed more than the other — perhaps because that partner has a higher salary — then it may be a good idea to split it equitably based on the percentage that each partner contributed to the account.

3 Setting up a joint account

If you decide to open a joint account with your partner, you’ll need to research accounts that can be co-owned. Once you’ve decided, check with the bank to see what documents and identification both of you will need to become joint owners of the new account.

You also might want to ask your bank if there’s a way to set a withdrawal limit on the account, where if one person wants to withdraw beyond the set limit, the other partner has to approve it too. This article was provided to The Associated Press by the personal finance website NerdWallet. Want to suggest a personal finance topic that Quick Fix can address? Email apmoney@ap.org