CATEGORY / Finance

Is it Wise to Opt for a Joint Bank Account?

If you are a fan of the classic Laurel and Hardy comedies, you may have surely watched their film ‘Thicker than Water’. In the film Hardy gets a jolt in the head for withdrawing money from the joint account held jointly with his wife. Although it may be a short film, but the ending of film correctly reflects the consequences of a joint account.

Many couples believe that the joint account is in their best interests. In fact financial experts may tell you that having a joint account is a good way to avoid probate when transferring money to your loved and dear ones. While having a joint account offers benefits, there are certain drawbacks of opting for a joint bank account.

Here you will learn about the risks of having a joint bank account for you and your partner so that neither part feel regret of polling funds later down the road.

Joint Bank Accounts: The Risks Unveiled

A joint account may signify a feeling of mutual trust between the partners, but the consequences can be far beyond what both the partners expect in case things get sour. The foremost risk of a joint bank account is that the poor credit history of one partner will affect the other.

Just living together will not affect credit ratings of the other partner. But once a joint account is opened both the partners will be ‘co-scored’. So, if one of the partners has a not-so-perfect credit score, it might be unwise to opt for a joint bank account.

Another risk of a joint bank account is that the partners will lose some privacy in how they spend the money. All the transactions from the account will be known to both the partners, which may create familial disputes between the partners.

Probably, the worst risk of a joint bank account is that one of the joint partners may secretly take out the money in which case there will be not many options apart from costly legal actions to get it back.

Lastly a risk of a joint account is that things may get messy in case one of the partners overdraws a large sum from the bank. This will make both the partners liable for repayment of the debt. That is why it is absolutely necessary that you close a joint bank account with an ex-partner.


You can open a joint account with anyone in the world including your husband/wife, parents, business partners, and even roommates. However, you should know that once you sign the papers and open the joint account, both of you will have 100% rights to the account. It doesn’t matter who opens the account or whose contributions make the majority of the account. In the legal eyes of the law, both the joint account holders are equal owners of the funds.

Although the wronged party may get back some of the account through legal action, but the time, effort, and tension involved in the process will certainly be great. There’s nothing that the bank can do to protect interest of any of the joint account holder if a person withdraws all the money from the account.

Things a Long Term Loan Can be Used for

A long term loan is one which is taken by a borrower to be paid over a period of time that is at least greater than a single year. There are some long term loans that can be taken for as long a period as 30 years. Companies, individuals and even countries take the advantage of long term loans to finance their immediate yet expensive needs.

Long term loans are not suitable for petty needs such as buying a few expensive suits. They are there to be used for the greater needs such as financing a property or starting a business. Here, we describe the few important things for which you can take a long term loan.

Starting a Business

A business depends largely on the presence of the capital investment. It is necessary to carry out important financial activities. For large organisations, financing business needs is not a problem. But for a small business owner, it can often be difficult to buy the required machinery or buy the raw material needed to complete an order.

Long term loans therefore offer the business a secure way to have the required capital. The loan has to be returned in easy to pay monthly instalments which form the set of the current liabilities of the business venture. There are many banks that provide long term loans to business entrepreneurs who need them to develop and apply their business ideas.

Buying a House

Another important need that only a long term loan can help to achieve is buying a house when you are still relatively young and do not have more than a few thousand pounds at your disposal. Properties are mostly very costly and even a small apartment often costs over hundreds of thousands of pounds.

The best way to buy a property therefore is to obtain a long term mortgage loan. This mortgage loan allows you to sustainably afford the property as you pay the costs in easy monthly instalments, although you do have to also pay back the loan that is due on the principal amount of the loan. Most home loans are for around ten or twenty years and therefore the amount of a single instalment is often very small and quite easily afforded by the borrower.

Buying a Car

Long term loans can also be used to buy a vehicle. Most people cannot afford to buy the cars directly from the savings, although they earn enough to be easily able to afford a car. They can take a long term loan in order to buy an expensive car and then pay the loan back over a number of years with an affordable monthly payment. It remains the best way to afford a car at the start of your career because you may not have the resources that are required to buy a new car.

Long term loans make these modern needs available to use and ensure that we are able to get them when we are young. Banks also require clients to give long term loans which are secure in most cases and allow them to earn as well with their available cash balances.