Joint savings accounts

What is a joint savings account?

A joint savings account is just a standard savings account that can be opened by more than one person. This means you and the person you open the savings account with will both be named on the account and have equal access to the account.

Joint accounts are often used by couples as a way to manage joint savings. For example, you and your partner might be saving towards a house deposit, wedding or simply saving for the future.

How does a joint savings account work?

When you open a joint savings account with another person you'll both be named as account holders. This means you'll both have equal access to the account and you'll both be able to make deposits and withdrawals. This is why you need to make sure you only open a joint savings account with someone you know very well and trust.

Savings accounts don't come with debit card access, so you'll usually need to link the account to a transaction account with the same bank. To withdraw cash from the account you'll need to transfer it into your transaction account first via mobile banking or Internet banking, then from here you can withdraw the money from an ATM. This is the same for any standard savings account, not just a joint savings account.

You can both transfer money into the joint savings account from your existing everyday bank account whenever you want to online. If you've got a specific savings goal you're aiming for, you might find that setting up regular, automatic transfers into the savings account can help you stick to your goal.

Do you need to be married to open a joint savings account?

No, you don't need to be married to open a joint savings account. In fact, you don't even need to be in any formally recognised relationship at all.

You and a friend might be saving for a holiday together and find a joint savings account is a good way to track your progress and motivate each other to stay accountable. Or, you might be saving for something with a sibling and find that having one account to pool your money is more effective.

Do I need a joint savings account or joint bank account?

A joint savings account is different to a joint bank account.

A joint bank account is an everyday transaction account that you can use to make purchases with the linked debit card or online, or withdraw cash from an ATM. If you open a joint bank account with another person, you'll both have access to the money in the account and can make purchases from the account with your own debit card. A joint bank account is a good way to manage shared expenses like groceries, bills, rent or other regular costs you have together.

In comparison, a joint savings account is a good way to work together on a shared savings goal. It's not an account for day-to-day spending or regular purchases and doesn't have debit card access. Because it's designed to help you save money, not spend money, you'll also earn some interest on the money in your joint savings account. A joint bank account doesn't pay any interest on your balance.

Meeting the account conditions on a joint savings account

Savings accounts often come with account conditions in order to earn bonus interest, such as depositing a certain amount of money into the account each month. If you have a joint savings account, you only need to meet the account conditions one time for the account.

For example, let's say your joint savings account had the following account conditions to be eligible for bonus interest:

• You must deposit $250 a month into the account
• You must make five debit card purchases from the linked bank account with the same bank
• You can't make any withdrawals from the account during the month

This means you need to ensure that $250 is deposited into the joint savings account each month – not $250 per account holder. You might choose to split this up so you're each depositing half.

For the monthly spend condition, again, this means you need to make five debit card purchases from the everyday bank account that's linked to your joint savings account. You don't need to make five transactions each. This transaction account might also be a joint account in both your names or it might just be in one of your names.

If there's a withdrawal restriction, this applies to both account holders. So if you don't make a withdrawal during the month but the other account holder does, you won't have met this account condition and won't be eligible for bonus interest that month.

How to find the best joint savings account: Tips and traps

There's no one joint savings account that is best for everyone, as it'll really depend on what you want the account for and what your savings style is. So what's best for you might not be best for someone else.

Tips when choosing a joint savings account

Here are a few questions to answer when comparing accounts to help you find the best joint savings account for your situation:

• Which bank is it with? If you both have existing transaction accounts with the same bank, it could be helpful to open a joint savings account with that bank too. This way you can see your accounts side by side in your mobile banking app or Internet banking portal and can make instant transfers between your accounts.

• What's the interest rate? Look for a joint savings account with a competitive interest rate, as this will help your savings grow quicker.

• What are the interest rate conditions? As well as looking for a good interest rate, don't forget to check what conditions you need to meet to earn this rate. In some cases you might need to meet a monthly deposit target, while in other cases you might need to restrict your withdrawals.

• What's the maximum balance limit? Savings accounts have a maximum balance that you can earn interest on. For some accounts it's $30,000 and others it's more than $250,000. Because there's two of you you could have quite a large savings balance, so check the limits to earning interest when comparing accounts.

Traps to watch out for when choosing a joint savings account

Here are a few things to look out for when looking for your joint savings account:

• Transaction account fees. Savings accounts don't charge monthly account keeping fees, but some transaction accounts do. If you need to open a new transaction account with the same bank (this is often a condition of savings accounts), check if there are any monthly account fees.

• Balance limits. Some joint savings accounts will only pay bonus interest up to a certain balance amount. It's best to check this limit before you open the account, otherwise if you've got more than the limit, you could earn no (or very little) interest.

How to open a joint savings account

Follow these steps to open an account:

1. Compare joint savings accounts. Use our comparison table above to compare a range of joint savings accounts. If you find one that's right for you, click the "Go to site" button where you can complete the online application process.
2. Complete the online application. Select the joint account option when beginning the application and provide names and personal details of both account holders. You might need to provide details of your linked bank account if you're already a customer of that bank.
3. Verify your identities. You'll both need to verify your identity using a driver's licence, passport or Medicare card.
4. Select how many debit cards you need. You'll often get a new bank account with the same bank at the same time that you open a savings account. This is so you can access the money in your savings account, as savings accounts don't come with debit card access. You can request both account holders to receive their own debit card this during the application process, if you'd like one each. When your account is approved, you'll each receive a debit card in the mail.