There are times in life when you need to close a joint bank account. This could be when your banking needs have changed or your relationship has ended. But don’t worry, it is a financially savvy and relatively painless business. We’re here to take you through how to close a joint bank account.
What is a joint bank account?
A joint bank account is an account owned by two or more people. This means everyone named on the account can sign cheques, pay in cash and make payments.
It can make sense to open a joint bank account if there is more than one of you managing household bills. That way, paying for bills or the rent or mortgage can all be done from one place.
The main thing to remember with a joint bank account is that you are co-owners. So you are jointly liable for any overdrafts or fees that are incurred. That’s why you should make sure you trust anyone you open a joint bank account with.
How do you close a joint bank account?
If you find that a joint bank account is no longer necessary, it’s a financially sensible decision to close the account.
Let’s take a look at some of the key steps to take when closing a joint bank account.
1. Bring the account balance down to zero
Just like a single account, if you plan to close a joint account, you will need to bring the account’s balance to zero. It is probably best to agree with your co-owner how to divide up what is in the account and then transfer the money out.
Similarly, if you have an overdraft, you will both need to clear this before you can close the account.
2. Cancel or transfer direct debits or standing orders
If you have any regular payments going out of the joint account, you will need to make sure these are cancelled or transferred to another account before closure. This will ensure that you don’t miss a payment and that you avoid running the risk of the account going into its overdraft.
3. Close the account in branch or by post
It will depend on which bank you hold your joint account with, but usually, you will need to go to the branch or write to your bank informing them you want to close the account.
Typically, only one person is to do it, but you may find that both co-owners need to sign off on the closure.
4. Cancel the joint account mandate if there is a dispute
If you are worried about your co-owner clearing the account without your knowledge, then you can cancel the joint account mandate straight away. This will freeze the account and mean neither of you can use it until you have settled your dispute.
This is more as a last resort, as freezing the account could present problems for direct debits or standing orders.
What other financial considerations are there?
If you are financially uncoupling from someone, then it could be a good idea to check your credit score. This is where you will be able to see where you are financially linked. You can do this with any of the three credit rating agencies: Experian, Equifax and TransUnion.
The areas you need to be aware of are joint debts, such as loans or overdrafts. This is because you will be jointly responsible for repayments and any missed payments could hurt your credit score.
Closing a joint account that is no longer required also makes sense from a legal perspective. If your account co-owner is sued or if they have creditors, they can access the joint money in order to make these payments. Closing the joint account means that you are reducing your legal liability in this regard.
