Money management is less complex if you use the correct type of bank account for your needs. Many prefer to open their own savings account, but some choose one together with someone in their family. If you are opening an account, then it is important that you know your own ABCs when it comes to individual and joint savings accounts to make sure that you end up making the right decision possible.
What is an Individual Savings Account?
It acts like your personal money box in the bank. Open Savings Account online at most banks without ever visiting their branch.
Besides this, the banks also offer a zero-balance account facility in which you are not required to maintain a minimum balance to keep your account active.
What is a Joint Savings Account?
A joint savings account is when two individuals obtain a common savings account. Imagine it as a shared wallet to which everyone on the account has access. Anyone able to share the account has the authority to deposit and withdraw funds.
Why opt for a Personal Account?
Having your own personal account means you’ll have all the privacy and control over your finances.
No other party can control your outgoings and incomes, therefore giving you more authority over your money management.
No one has to check your expense sheets for expense reimbursements, as it is your money.
You need no approval to spend it, and you can keep a tab on all your expenses.
This is particularly effective if you are saving money for personal indulgences, such as buying a new phone or saving money for college.
Why a Joint Account?
Joint accounts are a great option when it’s time to share money obligations with someone else.
Family members can simply track and manage household bills, roommates can conveniently combine their rent payments and couples can save a joint pot of money for larger purchases.
In the unfortunate event that one of the account holders is unavailable to check on the account, the other can access the funds with just a couple of clicks.
Which Account is Better for you?
Consider these questions before making a decision whether you want an individual or joint savings account:
- Do you want total control over your money, or are you OK with ceding some control?
- Will you be managing money on your own, or will it be a group effort?
- Are you making deposits to save up for some of your own dreams or your dreams together?
- Do you trust the account sharer?
Sometimes, it becomes necessary to have both types of accounts. You may want to set up a joint account for expenses with your family, then a separate account for your savings. There are many who should open savings accounts online who can start with a zero balance account and see which type works out better. Zero balance accounts are offered in both individual and joint accounts.
Your Final Decision
Keep in mind that the decision between a joint account or separate accounts really depends on your individual circumstances.
If you prefer control over your finances and desire privacy, a personal account may be the way to go.
If you share lots of expenses with other people and want to manage money jointly, a joint account may be ideal.
Conclusion
The positive aspect is that banks have a hassle-free, online process for opening savings accounts—specifically, Zero Balance Accounts for both. Spend time considering how you plan on using your money and select the account type that reflects your needs. If your circumstances change, you can always add another account later.
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