Compare Joint Bank Accounts

An in-depth look at joint bank accounts and how to compare them to make sure that you have information to make the right financial decision with Savvy.

Last updated on May 3rd, 2022 at 10:46 am by Cate Cook

Compare joint bank accounts with Savvy

Comparing joint bank accounts is all about looking at your financial needs and deciding which deal best fits your needs.  Savvy helps you in your decision-making journey by explaining the different features of joint accounts, and how you can use them to make your life simpler.  By bringing you clear and easy-to-understand comparison information, we can help you find a joint account that’s a perfect fit for you and your busy lifestyle.

How do joint bank accounts work?

Joint bank accounts function in the same way that single-entity accounts do.  They have all the functionality that you’d expect to find with a standard savings or transaction account.  Their key difference is that more than one person owns the account and has access to the funds in that account. 

There are various types of joint account available depending on the banking needs of the customer.  A few common examples include:

  • Joint accounts for couples or family members – these can range from transaction accounts that have multiple advanced features available for busy young couples or families to joint savings accounts with a tiered interest system suitable for an older couple to stash their nest-egg in
  • Pensioner or concession joint accounts – these offer basic banking features for concession card holders or aged pensioners in return for a fee-free account. Some such accounts even combine the function of a savings and a transaction account into one simple account which allows certain transactions (such as BPAY, EFTPOS and ATM transactions) but also pays some interest
  • Accounts shared between parents, guardians or Godparents and a child or children; or an adult carer sharing a joint account with another adult with mental disability or unable to make financial decisions for themselves; or joint trust accounts held on behalf of a child or adult who are not able to manage their finances or who have been left an inheritance which matures once they come of age
  • Joint business accounts – ranging from transaction accounts suitable for small businesses to more complex business accounts which may be linked to financial packages able to handle a company’s tax reporting obligations, produce BAS statements and handle payroll for a small to medium-sized company.
  • Joint term deposits – where an agreement is made to deposit a cash sum which is jointly owned for a defined period (from one month to several years) in return for a set interest rate, which is usually higher than would be earned in a standard savings account where the money can be withdrawn at any time.
  • Joint offset accounts – these are accounts which are linked to a mortgage account which reduce the interest paid on a home loan. They work by offsetting the home loan sum on a dollar-for-dollar basis, so for each dollar you have in your offset account, you pay interest on one less dollar of your home loan.  For example, if a couple has a $200,000 mortgage and $20,000 in their linked offset account, they’ll only pay interest on $180,000.

Comparing different types and features of joint bank accounts with Savvy through our free-to-use comparison service can help you find the account that’s just right for your personal needs.

What features should we compare to make sure we get the best deal?

If you’re wanting to open an everyday transaction account

  • Account fees – think about how you will use your account, and check what fees are charged for certain transactions. For example, is there a transaction limit after which fees will apply per transaction? Can you avoid paying monthly fees altogether if you deposit a certain set amount each month? If there’s a student, pensioner, young person or concession card holder as part of the couple wanting a joint account, all account fees may be waived depending on the bank you choose.
  • Functions – think about the type of bank account features you need. Do you want a joint account that just allows you to make basic payments using EFTPOS, PayWave or PayPass, BPAY and QR codes? Or would you like more advanced features like a round up facility or split accounts for monthly budgeting?  The newer online banks tend to offer a wider variety of advanced features for joint transaction accounts, so compare accounts from online banks if you want the most advanced features for your joint account.
  • Compatibility – check the account’s compatibility with your phone, smart watch or tablets you use to do your banking. Does the financial institution offer a mobile platform which is compatible with your existing devices, your credit card, digital wallet and any other accounts you may have you’d like to link to?
  • Special offers and bonus deals – Savvy can help you hunt down the bonus offers and special deals that financial institutions sometimes offer to attract new customers. These can include cashback offers, subscription TV services, loyalty rewards points, frequent flyer points and fee-free overseas ATM use. Compare the various special offers available to see which could offer you the best deal for your new account.

If you need a savings account

  • Interest rate – the interest rate offered will have a significant effect on how quickly your savings grow, so it’s important to compare the interest rate offered by various accounts to make sure you get the best account on offer. If both members of the couple are earning an income, having both wages paid into your account can be an effective way of earning additional interest. 
  • Bonus interest – some banks offer a bonus interest rate if a minimum amount is paid into the account each month (such as $1,000 or $2,000). For example, the basic savings account may only offer 0.2% p.a. interest, but if this minimum amount is paid, a bonus interest rate of 0.95% applies. With two incomes contributing to the minimum payment, couples can maximise the interest their savings earn and watch their savings grow more quickly.
  • Compounding – check and compare how often the savings account compounds the interest earned.  This refers to how often the interest earned is paid back into the savings account.  Some accounts compound monthly, some quarterly or annually.  The more often the interest is paid, the quicker your savings will grow.  Some accounts also give you the option of having the interest paid into a separate account.

Do both parties in a joint bank account always have equal rights?

No – a joint account between two consenting adults will usually offer equal rights to both parties (such as a standard ‘one’ or ‘either to sign’ joint account).  However, there are joint accounts where one of the signatories is the primary account holder and others are secondary holders who may have a debit card linked to the account but have limited account authority.  In such an example, only the primary account holder may be able to close the account or make withdrawals over a certain limit.

Such an arrangement may be appropriate if a parent opens a joint account for their teenager, or for a student who is travelling overseas.  They may want to be able to get money to their child in an emergency, but don’t want the teen to be able to make withdrawals over a certain limit or to close the account.

In business situations, a company director may grant themselves full access to the company joint business account and grant a company accountant, secretary or financial officer ‘create and update’ authority, but not ‘approve’ authority.  This would mean the finance officer could create and input a batch of salary payments, for example, but only the director could authorise the payments to leave the account.

Here are more of your questions about joint bank accounts

Can either partner in a joint account close the account?

This will depend on how the account was set up in the first place. There are essentially two types of joint account, known as ‘one to sign’ or ‘both to sign’.  This refers to the way the account operates: either both parties are permitted to carry out all transactions independently or both have to give authorisation for certain transactions to take place, such as withdrawals or closure of the account.  When you open your joint account, you’ll have to decide exactly how you want it to operate and which permission system to use.

How do joint account authorisations work?

In circumstances where more than one person’s permission is required to authorise payments from a joint account, the primary or authorising account holder can receive notifications about their account in a variety of ways.  Some banks use SMS text messages, whereby the primary account holder has to input a code sent to their phone.  Others use mobile phone notifications, where a person receives a message that their authorisation is required and has to log onto a particular app with their security details to authorise the payment.  In other circumstances, emails or online platform notifications are used.

Who pays tax on the interest earned on a joint account?

If both account holders are aged over 16 and under 65 and usually pay income tax, the tax is split 50/50 between each account signatory.  Young people under 16 are exempt from paying income tax on account interest, and those aged over 65 are subject to ATO deeming tax regulations.

Can more than two people open a joint account?

Yes – a joint account or term deposit can be opened by more than two people or even multiple entities.  For example, adult children may open a joint account with their elderly parents, where all account holders can use a separate debit card to pay for shopping or pay bills.  A company may have several directors, while a not-for-profit or trust may have multiple trustees who operate the joint bank account.