Joint Account Fees: The Unfair Cost of Sharing Money
If you’re married or in a long-term relationship, chances are that you have a joint account with your partner. It’s convenient and practical to pool your resources together, especially when it comes to paying bills or saving for a common goal like buying a house or going on vacation. However, what many people don’t realize is that joint accounts often come with hidden fees and charges that can add up over time.
The first fee that most banks charge for joint accounts is the monthly maintenance fee. This fee can range from as little as $5 to as much as $50 per month, depending on the bank and the type of account you have. What’s frustrating about this fee is that it doesn’t matter how much money you keep in the account; even if your balance is zero, you still have to pay the fee.
Another common fee associated with joint accounts is overdraft fees. These fees kick in when one person spends more money than they have available in the account, causing it to go into negative territory. While some banks may waive these fees for small amounts (e.g., less than $5), others will charge upwards of $30 per occurrence.
Some banks also charge transaction fees for each transfer made between joint accounts or between different types of accounts (e.g., checking to savings). These fees may seem small (usually around $1-$2 per transfer), but if you make several transfers per month, they can quickly add up.
In addition to these standard fees, some banks also offer “premium” services for joint account holders at an additional cost. For example, Bank of America offers a “SafeBalance Banking” package which includes overdraft protection and no monthly maintenance fee but costs an extra $4.95 per month.
There are also non-bank institutions like PayPal or Venmo which allow users to create shared wallets where multiple people can contribute and use the funds. While these services may be more convenient and have lower fees, they still charge transaction fees for moving money in and out of the shared wallet.
It’s worth noting that not all joint accounts are created equal when it comes to fees. Some credit unions or online banks offer fee-free joint accounts, while others waive certain fees if you meet certain criteria (e.g., maintain a minimum balance or make a certain number of transactions per month).
So, what can you do to avoid paying excessive fees for your joint account? First off, make sure you understand the terms and conditions of your account before signing up. Look for any fine print that mentions fees or charges and ask questions if anything is unclear.
If possible, opt for a bank or credit union that offers free joint accounts or ones with minimal fees. Alternatively, consider using non-bank institutions like PayPal or Venmo which have lower transaction costs but may not offer the same level of security as traditional banks.
Finally, keep an eye on your account activity to avoid overdrafts and unnecessary transfers. Set up alerts to notify you when your balance drops below a certain amount so you can take action before incurring an overdraft fee.
In conclusion, joint accounts can be a great way to manage money with your partner but beware of hidden fees that could eat away at your savings over time. Do your research and choose an account option that works best for your needs without breaking the bank (pun intended).