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Do you have to open a joint account when you move into a shared flat?

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Installing in a joint lease means not only sharing living spaces, but also pooling some expenses and de facto joint financial management. Several tools allow roommates to set a fair budget for their joint costs, including a joint account. Although it’s used a lot by couples, it’s also great for roommates due to its ease of use and other benefits.

How does a joint account work for a roommate?

Reminder: What is a joint account?

A joint account is a bank account that is opened and managed by at least two people: the co-owners. It is not reserved for couples: the joint account can be opened by anyone (without the relationship commitment) and the co-owners can be two, three or four depending on the banks. So it can also be used by friends, colleagues or roommates. It can take the form of a current account, but also a savings account, a securities account or a term account (these investment solutions are little used in shared accommodation, the common current account on the contrary).

Payment methods for the joint account

A joint account can be particularly suitable for joint rental due to the variety of payment methods, which all joint holders have access to:

  • Anyone can carry out traditional banking operations without the consent of other beneficiaries: deposits, withdrawals, transfers, direct debit licenses, etc.
  • Each partner can issue checks: On the check books associated with the account, the names of the partners are separated by the “or” sign.
  • Each person has his own personal bank card, issued in his name.

Joint account opening and management fees

As with any type of bank account, the bank with which the joint account is opened may charge an opening fee and an administration fee. It is usually very high in traditional physical banks, between the cost of the cards and the account maintenance fee. Online banks are often cheaper (the cards are often free). Account opening and management are also facilitated: for example, it is possible to open a joint account online in just a few minutes. On the other hand, online banks usually limit the number of co-owners to two: it is therefore a preferred solution for small shared accommodation, but generally inaccessible when there are more roommates.

Advantages and disadvantages of a co-signer account

Easier management of shared expenses

The main advantage of a co-signed account is of course the simplicity of co-financial management. Generally, each roommate funds the account with an equal amount, at the beginning of the month for example. The money is then used for all common expenses:

  • rent, which is sometimes beneficial to pay with a check;
  • Fees (water, electricity, gas, internet) are mostly paid by direct debit;
  • But also shopping and buying furniture or small household appliances.

Complete transparency among shareholders

A joint account involves complete transparency between shareholders, which can be an advantage as well as a disadvantage. Indeed, this is an advantage insofar as it is possible to refer to each transaction carried out by a joint tenant and thus know in detail the use of the joint funds. On the other hand, this transparency can quickly turn into a disproportionate monitoring regime if the management of joint funds is not based on strong mutual trust.

Shareholders are jointly liable

Like transparency, solidarity in accountability can be an advantage or a disadvantage. Indeed, in the event of financial difficulties related to the joint account, the shareholders are equal and joint: they share the responsibility and must, in fact, help each other. On the other hand, if incidents of payment or various debts aggravate to such an extent that a bank prohibition is taken, each partner may be prevented from banking, even without being originally at fault. Therefore, opening a joint account on the site depends above all on trust.

Bottom line: Should you open a joint account when you settle into a roommate?

Common number: viable option

A joint account is definitely a viable option when you’ve settled into flatshare: it allows you to manage joint expenses in an optimal way across different payment methods. It is ideal for small shared rentals of two, because it is easy to establish trust and reduce costs (possibility of going through an online bank). On the other hand, it is less suitable for a large gathering of strangers, because trust takes longer to establish and its costs are relatively high (the obligation to go through a traditional bank).

What are the alternatives to a co-signed account?

Several alternatives to a joint account are also applicable at a joint location:

  • An undivided account (or joint account) is very similar to a joint account. It is more restrictive, but also more secure: every transaction must be approved by all shareholders.
  • The joint accounts offered by the new banks are interesting alternatives: they are often free and can be used by more users.
  • Money-management apps are a bit more rigorous, but allow you to manage overheads without having to open a bank account: Each roommate records their expenses in the app, then calculates who they must reimburse to in order to balance the expenses with minimal transfers.

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