Whether you want to open up a joint bank account with your partner to make handling shared finances easier or you need to use a shared bank account to care for an aging parent, this guide will help you navigate the process.
What is a joint bank account?
Joint bank accounts are banking or chequing accounts that are owned by two or more people. Each person on the account can deposit and withdraw funds in the account.
There are several different individuals who would benefit from a joint bank account:
- Couples, both married and unmarried
- Parents of teenagers or young adults
- Adults assisting with aging parents
- Business partners
- Individuals who share a family cottage
Why should you get a joint account?
There are many benefits of opening a joint account with another person. A joint account gives both account holders full control of the funds to take care of shared financial responsibilities. For couples, a shared bank account can help you manage the day-to-day expenses, like how you are paying for takeout or your utility bills as well as help you build towards more substantial savings goals like a car, trip or home repairs.
For individuals who need to monitor a teen's account or an aging parent's account, having joint ownership allows you to manage the account when needed. You may be able to set some limits in place on your co-applicant for these situations, but it is best to inquire with your bank first in terms of how this works.
How do I open a joint account?
In order to open a joint bank account in-person at the branch, you and your co-applicant will need the following:
- One piece of government-issued photo identification, such as a valid Canadian driver's licence, valid Canadian passport or Permanent Resident card
- Documents from two independent reliable sources from the list of Acceptable Dual Process Documents/Identification, such as Canada Pension Plan, original birth certificate or a Canadian home/life/car insurance document.
Here is the full list of acceptable documents and alternative requirements at Scotiabank for newcomers or individuals under 15 who are applying.
To open a joint bank account, it is the same form used as an individual bank account, but you would fill out the joint applicant information alongside the applicant information.
The legal implications
There are significant legalities you should consider when opening up a bank account with another person. Most importantly, you need to choose a co-owner of the account that you trust since they will have full access and authority to the shared funds.
For couples or individuals that need to share some, but not all, financial responsibilities, a joint account can be used selectively as a second account. This allows each individual to protect themselves financially and keep some autonomy because they can have their paycheques deposited into a sole bank account and then deposit funds to a joint account to maintain shared bills and responsibilities.
In the case of one account holder passing away, the funds will typically still be available to the surviving account holder. However, this can be challenged if the deceased's funds are legally tied to an inheritance (for example if an older parent had a joint account with one of their children). Similarly, in Quebec, joint accounts are frozen upon the death of an account holder.
Because the legal and tax implications can vary based on different factors, including the account’s ownership, survivorship rights and which province you live in, consider talking with your legal and/tax advisor before you set up a joint account. You can find more information about joint accounts and the potential risks around them, particularly for seniors considering them, on the Government of Canada website.
Things to consider
Whether you are opening an account with a partner, family member or friend, it is essential to lay down ground rules before sharing an account. This is especially true for couples, since conversations around money can be complicated. Here are a few things to discuss before opening a joint account:
- Which types of spending should be discussed before approving? (ex. If purchases over $500 should be talked over first)
- Do each of us get a monthly budget for “fun money”?
- How should we prioritize bills and who is responsible for ensuring bills are paid on time?
- How do we tackle shared debt? What should we do with individual past debt?
- How will we save for shared financial goals, such as a vacation?
- How much should we save for emergencies?
A shared account for a family cottage might detail who is allowed to access the money and for what, and if approval is needed for all expenditures or only certain ones.
If you are sharing a joint account with an older parent, what are their wishes for that account and their funds after they pass away? Will it be part of their estate? It’s an important part of their estate planning to have those details well defined in their will to avoid potential future conflict or confusion around the account.
Opening a joint bank account with someone you trust can save you a lot of headaches when it comes to shared money chores. However, don't forget that you can take a hybrid approach to banking by sharing a joint account for certain expenses, while still having an individual account for personal spending.
You will want to find whatever the best option is for your situation. Come in to talk to a Scotiabank advisor to discuss if a joint bank account works best for your situation and needs.