What Are Joint Bank Accounts, and How Do They Work?

Case study 1: Joint focus on needs over wants

K.H. Ong, 31, Software Engineer 

H.Q. Chew, 30, Teacher

K.H.: We don’t have a joint account yet, but would want to set one up with my soon-to-be wife. It is easier to calculate our combined expenses at the end of the month, and it also allows us to set common goals for big-ticket investments, like housing, renovations and actual investments. Other than that, it should go towards paying common expenses like internet bills and groceries. 

If you were to think about it, since both parties have to be agreeable to use the sum within, it trains us to be focused on needs more than wants.

H.Q.: Should we set up a joint account, I feel the contribution would have to be a percentage of our respective salaries, not a 50-50 split. In the long run, it’ll be very tiring to keep up.

Case study 2: A shared responsibility for our financial goals

Samantha T., 26, Account Manager

My fiance and I first set up a joint account when we both started working, with the purpose of boosting the interest rates of our DBS Multiplier accounts. Our salaries and the dividends from the stocks we have individually are credited into this single account. We then transfer the money out into our individual accounts because, on its own, the joint account earns just 0.05% p.a.

When we get married, our plan is to top up and use the account for joint expenses, such as utility bills, groceries and other household necessities. Other expenses such as meals, cab rides and small purchases would continue to be on a ‘sometimes you pay, sometimes I pay’ basis, which works for us since neither of us spends excessively anyway. 

What we don’t use the account for is to grow our savings. As we are both very prudent with money, the money in the joint account is kept at a minimum. We prefer to keep spare cash in high-yield savings accounts or investments that reap higher returns.

With a joint account, it’s the start of a shared responsibility for our future and also a reminder that our financial decisions don’t just affect ourselves.

Case study 3: Transparency that eliminates arguments

Maggie R., 33, Marketing Manager

Before I was married, we had gotten a joint account together to manage rent and income from our Airbnb adventures and save up together for big expenses, such as flights to the US and more. We agreed on a small monthly amount to add to this account and maintained separate bank accounts for all other things in our life, such as savings and retirement, and would alternate payments when it came to outings together or with our friends.

Once we moved to Singapore, our situation changed, with us moving for his career and me being on the job market. At this point, we merged our monies into a single joint account and never looked back. Fast forward three years later, we’re married and maintain the same financial process. We still maintain separate accounts in the US and Australia for investments or other expenditures, but the joint account for our living expenses and day-to-day spending gives us a level of transparency and openness that takes away all of the arguments and disagreements. 

Everyone’s financial situations differ, but aligning your financial goals with full trust and transparency helped to create a positive financial situation in our relationship.

Case study 4: Balance of spending and saving

Dahlia Tan, 29, Art Director

We set up the joint savings account the moment we got our BTO queue number. We know that we are both committed to moving toward another stage of life where big spending will be coming along. 

In the first two years, we saved about 10% of our income. In our 3rd year, we saved 20% of our income. Our earning power is quite similar, so there’s no dispute over who should contribute more.

We used the account mainly for our joint expenses, from travelling to joint spending such as parents’ birthdays and gifts. A huge chunk was used for the wedding we just had back in December. Moving forward, we anticipate another huge spending at the end of 2021 when our BTO arrives.

One of the pitfalls of a joint account, I feel, is the danger of overspending. To prevent this, every time we hit $10,000, we will open a fixed deposit account to prevent overspending. Therefore, this joint account functions very much like a spending account, and we know we have safely kept some money aside.

Case study 5: There’s room for both joint and personal savings accounts

Hazel Cheng, 29, Web Content Writer

Stepping into the 12th year of courtship with my soon-to-be husband, it’s a wonder we haven’t really talked about opening a joint savings account. I don’t blame him for not broaching the subject — I’m stellar at spending, and he’s wonderful at saving. 

Don’t get me wrong; we are very transparent about our finances. In fact, in order to take advantage of the higher interest rates that some savings accounts offer, we’ve started pooling some of our savings together recently, although the UOB One account is legally my savings account.

Each month, each of us contributes a specific sum of money to the account. We have an Excel spreadsheet detailing how much in shared savings we’ve mustered, say, by March 2022. It keeps the tracking part of our shared savings a little more manageable, though I must concede that it is a nightmare on my end. I never really knew how much money there was in the account—that’s fully mine to spend and use—until I squinted at the Excel spreadsheet and punched in the calculator. We really need to figure a better way out, don’t we?

As for an actual joint savings account, I reckon we’ll open one when our BTO is ready. It will definitely be convenient to split home and kid-related expenses. However, there should be ‘rules’. For example, how much each one is contributing and what kind of expenses can be paid for using funds from the joint savings account. We will still have our own personal savings accounts.