The best joint bank accounts

CoupleJoint accounts can be a practical way to handle money with a partner, relatives or housemates. They are a good way to manage shared financial responsibilities like a mortgage, rent and household bills.

Most current accounts available from banks and building societies can be opened jointly with one or more people.
But which are the best bet?

Best for bills
If you want to open a joint account for practical reasons like sharing the cost of household expenses the Santander 123 Current Account is a good choice.

That's because it pays up to 3% cashback on household bills.

This bank account earns 1% cashback on water bills, Council Tax and Santander mortgage repayments (if you have one). Any direct debits for gas and electricity bills will earn 2%, while the top 3% rate of cashback is paid on communication bills like mobile, home phone, broadband and TV.

The account also offers up to 3% interest on your balance. 1% interest is paid on balances from £1,000, 2% is paid on balances from £2,000 and 3% is earned on balances between £3,000 and £20,000.

Couples who want to use the Santander 123 Current Account as their main account stand to benefit most as two salaries have the potential to deliver even more credit interest. But as a secondary account, perhaps used by housemates just for bills, the in-credit interest might not deliver much.

You have to pay a fee of £2 a month to get access to the account. You need to have £500 a month going into the account and to have two direct debits set up. But with most household costs exceeding this, it shouldn't be a tough target to reach.

Best for cash rewards
If the sound of cashback is appealing but you won't necessarily be paying eligible bills from the account you can still get a cash reward.

The Halifax Reward Current Account will pay £5 into your joint account each month, giving you £60 in a year.

You will need to pay in at least £750 a month and pay two different direct debits from the account to trigger the £5 bonus.

The great thing is the bonus gets paid even if you empty the account each month.
Another advantage of the Halifax Reward account is that you can hold one current account in a sole name and one in a joint name so you can get access to the £5 cash reward twice in a month. A couple could conceivably earn £60 each separately and then £60 in their joint account bringing the total reward to £180 bagged in a year!

Best for in-credit interest
If you don't plan to constantly spend what's in your joint account you should take advantage of a current account that pays a decent level of credit interest.

I've already mentioned the Santander 123 Current Account which will pay up to 3% on balances from £3,000 up to £20,000. But this might be a difficult balance to maintain, especially if you don't plan to have it as a main account.

For those likely to have a smaller balance the Nationwide FlexDirect current account will pay 5% on balances up to £2,500 for the first 12 months.

But you will only get this rate if £1,000 is deposited into the account each month.

The account also comes with a 12-month fee-free overdraft which can absorb any mishaps on bills or deposits and access to exclusive customer rewards called Flexclusives.

A reward for switching
Most people that use a joint account will also have a separate sole account which their salary is paid into.

But if you're in a situation where you want to make a joint account your main account, perhaps with someone you trust like a partner, you can get some great offers for switching.

With the First Direct 1st Account you can get £100 for making it your main bank.

In order to qualify for the bonus one or both will need to switch their account using the Easy Switch service, set up at least two direct debits and pay in at least £1,000 a month to avoid the £10 fee.

The bonus offer only applies if you and your partner are new customers and is only paid per account not per person.

With a 1st Account you get access to a 24-hour customer service helpline and exclusive products only reserved for customers.

Elsewhere the Halifax Reward Current Account also carries a £100 bonus offer as well as the £5 monthly cash bonus.

You need to switch via its switching service to qualify and move all automated credits across, deposit at least £750 a month and set up at least two direct debits to qualify for the incentive.

Like the First Direct deal the bonus is per joint account rather than per customer.

Earn £100 or up to 5% interest by switching to another bank

Joint account downsides
I'm a big fan of joint accounts as they are handy tools to manage shared financial responsibilities, but they also carry risks.

Here are the main pitfalls to consider before taking the plunge with a partner, relative or housemate:

A joint account links people financially and means they can impact your credit rating. So another account holder with a low credit score may damage yours. Read How to untangle joint finances for more.

If the account becomes overdrawn by one person, each account holder is liable for repaying the debt. Read You could end up with debt that isn't even yours for more.

You lose privacy on a joint account as all transactions will be able to be viewed by all account holders.

If one account holder takes money from the account without your knowledge, you won't be able to get it back. You should only open an account with people if you can trust them to act responsibly with the shared pot.

Some joint accounts can be set up as both-to-sign, where all account holders have to give permission every time money is taken out of the bank account, or either-to-sign, which allows any account holder to withdraw money.

The bank or building society you open a joint account with should set out clearly who can take money from the account, how overdrafts will be handled and how to handle disagreements or the end of a relationship between joint account holders. This agreement is called a mandate, which all account holders will have to sign.

For more information about joint accounts the British Banker's Association has put together a handy leaflet and the Citizens Advice Bureau has outlined a few things to think about.

How to dispute your credit record
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The best joint bank accounts

Don't wait until you need to apply for credit to view your credit record – do it now so you know where you stand and can deal with any disputes. When applying for credit, you give the lender permission to view your record, so it makes sense to view it yourself first.

You can access your record via any of the main credit agencies in the UK. By law, all the credit agencies are required to provide you with a one-off copy for just £2 so don't be hoodwinked into signing up to pay a monthly fee.

Your report shows what credit accounts you've had and whether you've made repayments on time and in full. According to Experian, items such as missed or late payments stay on your credit report for at least three years, while Court Judgments for non-payment of debts, Bankruptcies and Individual Voluntary Arrangements stick around for around six years.

Your credit report shows the current address at which you are registered to vote as well as details of other addresses you've been linked to in the last six years. Another section lists people you have a financial connection with, such as a joint mortgage. When you apply for credit, lenders are able to look at their credit history as their circumstances could affect your ability to repay what you owe.

Scrutinise your record to make sure there are no mistakes. Even a minor error such as an incorrect address or wrongly linked account could hinder your chances of being approved for credit so make sure all your details are correct and that all your borrowings are on record. If there is a discrepancy, contact the three main credit agencies to get it corrected.

A default notice is note that a lender puts on your credit file if you fall behind with your payments. It is a warning sign to future lenders about your reliability to repay credit and could mean that they will be less likely to lend to you or will increase the interest rate.

If the default notice is incorrect, perhaps because you have repaid the loan in full or did not take out the credit and suspect that you have fallen victim to fraud, you can apply to have a default notice removed. A default notices will only be removed if it is factually incorrect – not simply because you are embarrassed by it.

Start by writing to the agency asking it to either remove or change the entry that you think is wrong. It will investigate the matter and find out whether you have been the victim of ID theft or a bank's mistake.

Within 28 days from receipt of your letter the agency should tell you how the bank has responded. If the bank agrees to change the entry, they will authorise the agency to update their records. They should also send updates to any other credit reference agencies they use.

You can also contact your lender directly to query a mistake. If the lender agrees to the discrepancy, ask them to confirm this in writing on their letterhead and send a copy to the agency, asking them to update your file.

If you are unhappy with the response or would just like to explain a missed payment on your file you can send a Notice of Correction. This is a statement of up to 200 words that will be added to your file. Although lenders don't have to take this information into account, it at least gives you the chance to tell your side of the story.

Experian states that agencies will also help you escalate the dispute to a third party arbitrator if necessary, such as the Information Commissioner's Office.


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Beware the small print
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The best joint bank accounts

It is reasonable to assume that if you take out a mobile phone contract at £30 a month for 24 months that's exactly what you'll pay unless you exceed the tariff. Yet mobile phone providers have come under fire for a snag buried in the small print – a clause to allow mid-contract price rises.

Prices are rising by a median of 81p a month and 70% of consumers are completely unaware off this sneaky move, according to Tesco Mobile, so be sure to check any new contracts before you sign the dotted line.

Financial service providers always refer to 'typical APR' in advertising to attract customers with favourable rates of interest.

Yet the typical APR on loans and credit cards is only available for those applicants who have a squeaky clean credit record, everyone else could end up with a much higher rate. For example, under EU rules, credit card providers only have to provide the typical APR advertised to 51% of applicants.

So always consider this when applying for accounts and products, and if approved – look out the actual APR that you will be charged.

The highest paying savings accounts on the market tend to come with a string of strict terms, which if you fall foul of, result in a drop in interest. Common requirements include paying in a set sum each month and not making withdrawals during a set period.

Make sure to fully understand these terms before opening a savings account and if you choose an account with a six or 12 month bonus, remember that this will plummet when the bonus period ends.

Cashback credit cards that pay you a small percentage each time you spend on the card are full of loopholes in the small print. All have a maximum spend, but many have a minimum spend too.

For example, the Sainsbury's Cashback Low Rate card advertises that it offers users 5% cashback for the first three months. However the 5% cashback is capped at £50 a month. A further 5% cashback is subject to you spending £500 a month on the card (£250 of that at Sainsbury's).

Attempt to repay your mortgage early and you may be greeted with a hefty fee in the form of an early repayment charge. These penalties vary from lender to lender and even deal to deal, but are typically be around 10% of the outstanding balance.

Details of any early repayment charges should be clearly outlined in your mortgage contract but it is worth double-checking with your lender before you try to make a payment.

Insurance is an incredibly complex area of personal finance and different forms of cover are riddled with different hitches that make it crucial to read the small print. Failure to do so could lead you to pay for a product you would be never be able to claim upon, or unknowingly do something that invalidates your claim.

Always buy the right level of cover for your needs and pay close attention to any exclusions in the policy wording. For example, many travel insurance policies for winter sports won't pay out for treatment of injuries incurred while under the influence of alcohol.

Think a credit card can't do any damage at home in your drawer? Think again. Some credit and store cards charge a dormancy fee if you don't use them regularly.

For example, all Santander-issued store cards, including Topshop and Laura Ashley cards among others, charge a fee of £10 if you remain in debit for three consecutive months.

Exceed the monthly usage allowance in your broadband deal and you could be hit with a huge fee. Common with the cheapest broadband deals on the market, penalty charges for going over your contracted limit can push your bills up even higher than if you paid for a deal with unlimited usage.

According to Talk Talk, some households are being forced to pay an additional £40 per month for exceeding their usage allowance. BT for example, charges £5 per every 5GB extra used.

Familiarise yourself with the download limit in your package and the penalties for exceeding it, decide whether you are better off with an unlimited deal.

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