Joint bank accounts: which are best for rates and rewards?

If you need to open a joint current account, these accounts are the best to go for.

Couple saving money to buy house

Opening a joint current account can be a practical way to handle money with a partner, relatives or housemates, when you have shared financial responsibilities like rent or a mortgage and household bills.

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

Best for paying bills

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

That's because it pays up to 3% cashback on certain bills paid by direct debit. You can get 1% cashback on water bills, Council Tax and Santander mortgage repayments (if you have one).

There's 2% cashback on gas and electricity bills or Santander home insurance premiums, while the top 3% rate of cashback is paid on communication bills like mobile, home phone, broadband and paid-for TV packages.

The account attracts a £1 monthly fee and in order to earn cashback you will need to deposit £500 a month and have two direct debits set up.

If you're also interested in earning interest at the same time you could go for the Santander 123 Current Account.

This offers the same level of cashback on household bills (providing you deposit £500 a month and have two direct debits set up) as the Santander 123 Lite Current Account but also offers 1.5% interest on balances up to £20,000.

The extra benefits on the Santander 123 Current Account mean you will have to hand over a beefier £5 monthly fee, so you will need to weigh up if it is worth paying more for.

Alternatively there's the NatWest Reward Account, which costs £2 a month.

It lets you earn 2% cashback on seven types of household bills, including Council Tax.

Best for cash rewards

If the sound of cashback is appealing but you won't necessarily be paying eligible bills from the joint account, you can still enjoy a cash reward on some accounts.

With the TSB Classic Plus Account you can earn £5 cashback every month just for having two active direct debits and an additional £5 in cashback if you spend on your debit card at least 20 times in a month, until 30 June 2018.

The Co-operative Bank is offering those that have its Current Account and sign up to the Everyday Rewards programme the chance to earn £5.50 a month or £66 a year.

You'll get a cash reward of £4 a month plus the chance to earn 5p on every debit card transaction you make in a month up to £1.50.

To be eligible you will need to deposit £800 a month into the account, have four active direct debits set up, log into online or mobile banking at least once during the month and stay opted in for paperless statements.

Alternatively the Halifax Reward Current Account will pay £3 into your joint account each month, giving you £36 in a year as long as you pay in at least £750 a month, have two direct debits set up and stay in credit.

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.

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 Tesco Bank Current Account will pay 3% on balances up to £3,000 until 1 April 2019. However, you must pay in at least £750 a month and have at least three direct debits set up.

Alternatively, there's the TSB Classic Plus Account which pays 3% on balances up to £1,500. Unlike the Nationwide account this rate won't fall away after 12 months plus you only need to deposit £500 each month and opt for online correspondence.

With this account you can also earn £5 cashback every month just for having two active direct debits and an additional £5 in cashback if you spend on your debit card at least 20 times in a month, until 30 June 2018.

So you could potentially earn £45 in interest and £120 in cashback, giving you an extra £165 in a year!

For larger balances the Santander 123 Current Account is best. This account will pay 1.5% on balances up to £20,000.

Couples who really want to maximise the credit interest benefits should consider opening a sole account each and a joint account, which means you can earn interest on larger balances.

With the Santander 123 Current Account, for example you could potentially have £60,000 spread across the three accounts that will earn the 1.5% rate, which means you could eatn £900 a year in credit interest alone.

Best for switching rewards

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, which you can share.

Switch to the M&S Bank Account and you'll score £185 in M&S gift cards.

You'll get a £125 gift card when you switch using the Current Account Switching Service and up to an additional £60 when you stay for 12 months (£5 a month). The only conditions are that you pay in a minimum of £1,000 and have two active direct debits.

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.

Halifax is offering a £125 bonus to switchers (falling to £75 on 31 July). You need to switch via its switching service to qualify, move all active credits and direct debits across and close your old bank account.

With these switching offers it's important to remember that the bonus offer is only paid per account not per person and some will limit the offer to completely new customers, so if you've claimed the reward as a sole customer before it might not apply to your joint account.

Joint account downsides

I'm a big fan of joint accounts as they're 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;
  • If the account becomes overdrawn by one person, each account holder is liable for repaying the debt;
  • 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.

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.

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