Estimated reading time: 11 minutes
Explore the concept of joint accounts in Canada and understand the advantages of shared finances. Get insights into opening and managing joint bank accounts.
Disclaimer: These are my views and not those of a professional banker. Please contact your financial institution to answer any questions, as all banks differ.
Pros And Cons Of A Joint Bank Account
A joint bank account, also known as a joint deposit account, is available in Canada for those who want equal access to make withdrawals and deposits, pay bills, or carry out other transactions as needed.
The main ingredient of a joint account is dual responsibility.
You may get married or want to open a joint account with your spouse or partner.
Perhaps you are an adult who wants to open a joint bank account with a parent or vice versa, a parent who wants to open a joint account with a child.
Alternatively, you could be roommates, family, business partners, or even best friends with someone who wants to open a joint account.
Either way, you can open a joint account at banks in Canada, but there are risks involved and a process you must go through, which I will explain below.
Over the past ten years of living in Canada and the last year, we’ve been through many ups and downs with a few banks, mainly due to marriage, death, and health reasons.
We’ve learned a few lessons, especially about what happens to a bank account if a spouse dies and you’re not named on the account.
In the process, the financial institution taught us how to join a bank account with a parent.
Related: Can my parent determine what is happening in my bank account?
Banking In Canada
I opened a bank account in Canada before moving to Canada, but while visiting, I could move money from the UK to Canada.
I was already married to my Canadian bride, which helped speed the process up for me in terms of having someone back me up.
Surprisingly, I was also given a PC MasterCard, which my wife was the primary account holder, so I had access to while in the UK.
Related: Free Credit Card Comparison in Canada for the Best Rates
Building Credit In Canada
Once I moved to Canada, I had to venture independently to build credit in Canada, which meant finding any business or Canadian credit card to give me a credit card in my name.
Thanks to Sears Canada at the time, I was successful with this, but they no longer exist as they closed up shop over the past year.
In the end, we faced his and her bank accounts, credit cards, and utility bills, with nothing in joint names.
It was time for us to have a joint bank account because my credit score in Canada had increased to a safe area.
We also learned about the red tape involved if one spouse were to die, which I briefly discussed below and have written about before.
What Is A Joint Bank Account?
A joint bank account, joint deposit account, or mutual bank account is a bank account set up with another person(s) with access to the money going in and out of the account.
In other words, more than one person can access a bank account at a time.
For example, my mother-in-law has a joint bank account with her children, who all had to meet in person at the bank, where the primary account holder had to consent to add her children to the account.
The number one reason for joint account access was declining health.
So, while she could still consent, it was essential to ensure access so the kids could use the money to pay for anything she needed.
Her children also had to consent that they wanted to be added to the account because you can’t just add anyone.
The banking representative also explained the risks involved with being a joint account holder to them, which is very important to know before jumping in.
From start to finish, the entire process took about one hour.
Risks of a Joint Bank Account
Before getting yourself involved with a joint bank account in Canada, it’s essential to understand the risks involved, such as;
- Right of survivorship when one of you dies, no matter what the Will or estate plan says. If you have a joint account with a parent and a parent dies, you are now the primary account holder.
- Money in the account is open to creditors’ claims for both of you.
- Any outstanding debt by the bank can be recovered even when one of you dies, as you are jointly responsible for all unpaid amounts.
- The bank will act on instructions from either account holder. This means either of you could drain or remove funds from the bank account without consent from the other.
- If you have a chequing joint account, either bank account holder can write a cheque.
- If the account balance is zero, the joint account can be closed by either of the account holders.
Non-Bank Related Joint Account Risks
A non-bank-related risk of a joint bank account is when you have a saver and a spender.
This can cause disaster and is certainly something to discuss before you open a joint account.
Different views on money handling can scare couples from allowing each other access to their money.
If you are common-law or married, keep a discretionary bank account for savings and a joint account to pay bills.
Related: Money and Marriage- How to make it work
Types of Bank Accounts
Every bank in Canada offers a chequing account and savings account to potential clients.
Each bank has different products for loans and savings opportunities for their customers.
Anyone interested in opening a Canadian bank account should research the different institutions online.
Related: Top 4 virtual online banks in Canada
There’s no need to phone or visit a bank to learn more information as it’s online for easy access.
Best Joint Savings Account
I don’t think there is one best bank account for married couples or those looking to join forces financially.
To learn what meets your financial needs, list your bank account needs and wants.
- TD Canada Trust Toronto Dominion Bank
- Bank of Montreal (BMO)
- Bank of Nova Scotia (ScotiaBank)
- Royal Bank of Canada (RBC)
- Canadian Imperial Bank of Commerce (CIBC)
- Simplii Financial (Online)
- Tangerine Bank (Online)
For example, opt for a financial institution with no fees if you don’t want to pay bank fees.
Every bank account is different; you might want peace of mind with an unlimited bank account that offers unlimited ATM transactions, free cheques, e-transfer, money back, and fraud alerts.
You may also get a fee rebate if you keep your bank account balance above a certain amount.
My mother-in-law gets a fee rebate at TD Canada Trust if she keeps her savings account over $4000 plus a seniors rebate.
Desiring a brick-and-mortar financial institution increases your options, but your choices are limited to availability in your area.
If you opt for a bank outside of where you live, then you must drive to gain access to their services during business hours.
Setting Up A Joint Bank Account Online
Can you set up a joint bank account online?
You can, in part, set up a joint account online, but you likely will have to call the bank so they can verify your identity and other legal requirements.
If you’re not already a customer, entering the institution is probably your best option for setting up a joint bank account.
Setting up a joint account at any bank is relatively simple, provided you have the required documentation.
When we decided to open a joint bank account with Simplii Financial, we were already clients and only needed to make a phone call.
They had our personal information, so opening a joint account with limited questioning was easy.
Setting Up A Joint Bank Account After Death Of A Parent
Both parties must be present when opening a joint account when setting up a meeting with a banking representative.
Mrs. CBB did this when she set up a joint bank account with her mother after her father died.
You will also have to show legal identification such as a driver’s licence, birth certificate, passport, permanent resident card, social insurance number (optional), and utility bill to show your current address.
Joint Bank Account But Not Married
If you open a joint bank account and are unmarried, you still have the same risks as if you were listed above.
Types of Joint Bank Accounts
When we opened a joint account, it was for bills, and we could always see what was going in and out of it.
We could deposit money into the bank account and withdraw money when needed.
However, it was the best option for setting up our automated bills and paying others as needed.
Our joint savings accounts with Simplii Financial are where we save our emergency savings and projected expenses.
Doing so lets us see exactly how much money we have at any given time.
Related: Download a free copy of our Excel budget now
The types of savings and other bank accounts your financial institution offers vary from bank to bank.
Some banks offer certain perks to their customers, such as cash-back offers, higher interest, or interest boosts from time to time.
Simplii Financial, from time to time, offers us an interest boost on any new deposits in our joint savings account.
Earning a higher interest on new deposits is better than getting nothing.
Your best bet is to find out what bank accounts the bank offers (checking online is the easiest option) and then ask any questions about opening a joint account.
Closing a Joint Bank Account
Sadly, not all relationships last forever.
When you own a joint bank account and are no longer with your partner, you can close it, but beware, you can both do it without the other present.
Both holders don’t need permission to close a joint bank account.
If you are part of a joint account, almost all banks will allow one person or the other to close it unilaterally.
One account holder can close the account without the other person, provided there is a zero balance.
You must provide identification when closing any bank account, so be prepared to show this.
If you are the primary account holder and want to remove someone from a joint account, you may be able to do this in person, provided your bank allows it.
Anyone listed on the joint bank account at TD Canada Trust can close it in person with identification.
If you have a zero balance, you can also call the bank to have it closed.
You can also log into your online banking portal and send them a secure message requesting that the joint account be closed.
This must be done in person if you are trying to close a joint business account.
Death and the Joint Bank Account
When someone dies and is part of a joint bank account, the other bank account holder now owns the account whether they are listed on the will or not.
This is very important for married couples to understand because if you are not listed on the account and your spouse passes away, the bank account will be frozen by the bank.
You may also have to deal with probate on the account and wait for a period from the bank to gain access to it.
Once you provide a death certificate and other legal documentation, such as your spouse’s Will and power of attorney, the bank begins the process.
Benefits of a Joint Bank Account
- Less hassle if something were to happen to one of you, such as death or illness.
- Ability to watch what your child is doing with their money or to guide them.
- The ability to deposit and withdraw easily helps pay bills without hassle from two bank accounts and transfer money.
- Those listed on the joint account can get a debit card, cheques, and easy access to the account.
- It’s easier to track cash when you are budgeting, which saves time.
- It is a great way for couples to combine money and helps to build trust.
- Earn rewards points from a joint bank account and a linked credit card. (We did this with our PC Financial MasterCard to earn Optimum Points. We also have this set up with TD Canada Trust and earn cash back each month.
Although we have a joint account now for all of our banking needs, the only pitfall is not being able to buy something without the other knowing, especially if it is a gift.
This is when it’s easier to take out cash, or at least for us, it is.
You can also learn more about joint bank accounts in Canada for seniors here.
Discussion: Do you have a joint bank account, and what are your thoughts on owning one?
Leave me a comment in the section below, and I’ll do my best to respond to everyone.
When my mom passed away, my dad added my sister to the bank account as his health wasn’t good. Made things so much easier when he passed away 3 months after my mom. Once we knew all bills were paid in full and taxes for that year were done, my sister closed the account and we split the money evenly between us.