One of the more monotonous tasks that comes with the end of a relationship is sorting out finances. But it’s important, both for the sake of keeping finances organized and for moving on in life. Closing a joint bank account is a crucial step in this process.
A joint bank account is a type of bank account that’s held by two people, commonly by two people in a relationship. It allows both account holders to pay bills, deposit checks and contribute toward shared savings goals from one place. It also means both account holders share financial responsibility and accountability, which can get complicated if their relationship ends or they no longer need the shared account.
A report by Bowling Green State University shows that about 14 out of every 1,000 married women got divorced in both 2020 and 2021 — that’s the lowest divorce rate in 40 years.
Still, divorce isn’t the only reason someone might need to close a joint bank account. Separation in other forms or simply wanting to be more financially autonomous might also be factors. In any case, there are a few important steps to take to close a joint account.
Key joint account statistics
Bankrate insights
- While 34 percent of couples have a mix of joint and separate bank accounts, 43 percent have only joint accounts.
- Millennial couples are the least likely to have only joint accounts, with 31 percent keeping all their finances in joint accounts, followed by Gen Z couples at 36 percent.
- Couples earning less than $50,000 annually are also less likely to have joint accounts, with 32 percent saying they have completely separate accounts, compared to 23 percent of couples overall.
- A little over half (54 percent) of couples say they make day-to-day financial decisions jointly.
- About a third (32 percent) of those in relationships say they’ve kept financial secrets from their partners.
Sources: CreditCards.com, Fidelity
Reasons to close a joint bank account
One of the more common reasons why someone might need to close a joint bank account is because of a relationship ending. Couples may have used a joint account to pay for shared expenses and meet shared savings goals, but they’ll need to divide their finances in the case of a divorce or separation. Doing so can ensure that partners aren’t still financially responsible for each other, and it can help them move on.
But there are other reasons to close a joint bank account that might have nothing to do with a relationship ending. In some cases, it might become fruitful for couples to have separate accounts, especially if they’re seeking out more financial autonomy.
Some other reasons why someone might want to close a joint bank account include:
- Partners may not want to be accountable for each other’s debts.
- Friends or former roommates have a shared account they no longer need.
- Account holders were business partners and no longer work together.
- One of the account holders dies.
- The account was shared between a parent and child, and the child is old enough to have their own account.
Open a new bank account before closing the old one
Regardless of the reason for closing a joint bank account, you’ll need a new account before you can close the old one. Then, you have somewhere to transfer all your finances, recurring payments and check deposits into.
If you don’t have a separate checking or savings account in your name, compare high-yield savings accounts and checking accounts where you will be able to transfer your portion of the money.
You might also find that after opening a new, separate account, you don’t need to close the joint account. Over half of couples (57 percent) have at least some separate accounts, with 34 percent having a mix of separate and joint accounts, according to a study by CreditCards.com. Here’s how it varies by generation.
| Generation | Percent of couples with at least one separate bank account | Percent of couples with only joint accounts |
|---|---|---|
| Gen Z (ages 18-25) | 64% | 36% |
| Millennials (ages 26-41) | 69% | 31% |
| Gen X (ages 42-57) | 52% | 48% |
| Baby boomers (ages 58-76) | 51% | 49% |
In general, couples of younger generations are more likely to have at least one separate bank account. Gen Zers are somewhat less likely than millennials, though that may be because they’re less advanced in their careers and financial lives, and therefore have less incentive for financial autonomy. Older generations, on the other hand, may be more likely to share accounts out of tradition, or because they have more shared expenses and savings goals.
Divide the assets
When you and another account holder split off into separate accounts, you’ll need to determine who gets what portion of the finances. Account holders who are ending a relationship may need legal assistance to determine how much money each person gets.
John Kay, an Illinois-based family law attorney at Hurst, Robin and Kay, says that “funds held in any form of joint account are presumptively ‘marital property’ subject to equitable distribution.” In other words, those shared funds are considered property and subject to various laws.
“As a couple approaches or considers proceeding with a divorce, it is advisable to not alter the status quo, such as by closing joint accounts that have historically been utilized as the source for the payment of fixed living expenses,” Kay says. “My advice to prospective clients is that they should not close or divide any accounts until such time as both spouses are able to determine the value of the marital estate, [which includes] all marital assets as well as liabilities. Once a couple decides that they are going to proceed with a divorce, all assets should be divided by agreement and through counsel, rather than unilaterally.”
When a couple can’t agree on how to divide their assets, the first step a court usually takes is to classify the assets as either separate or marital.
Income that is earned during the marriage is typically considered marital property and is subject to division in the divorce. If the money was earned before the marriage or was acquired as a gift or inheritance to one spouse, it’s generally considered separate property and remains with the spouse who received it.
Whatever you do, don’t do the division on your own.
“If one spouse liquidates funds from an account absent an agreement with the other spouse, that spouse will likely owe a credit to the marital estate for at least 50 percent of the balance that they removed,” Kay says.
Cancel auto pay
Closing a joint bank account isn’t simply about the money that’s already in it. You’ll also need to think about the money that is regularly withdrawn. Do you have any recurring direct deposits that are set up for the account? Have you and your spouse arranged for auto bill pay for your utilities or other expenses?
Be sure to review the account’s monthly activity. Look out for any of the following automated transactions:
- Recurring bills
- Subscription services
- Loan payments
- Automatic transfers into savings
- Recurring direct deposits
This also can be a helpful exercise in establishing a budget. As you track automated expenses, you can see how much you’re being charged each month for expenses you may have put out of mind. You may notice subscriptions you want to cancel or bills that can be lowered.
Close the account in person or online
Getting your account balance to zero does not mean it’s closed. Instead, your bank or credit union can still charge you monthly service fees while it sits unused. You will have to specifically submit a request to close it.
First, call the customer service number to ask if you can close the account over the phone. If you still need to pay a visit to the branch, you may not need to do it together. For example, TD Bank requires both account holders to be present when opening a joint account. When closing, though, the bank only requires one party to be there. Just be sure to bring some form of identification, such as a photo ID.
If you and your partner have a joint account at an online bank, there is no need for any in-person efforts, but you may need to coordinate logging in separately to officially close it.
It’s important to double check that the account balance is at zero before closing it. If not, you’ll need to transfer any extra funds into another account first, so you don’t incur extra fees.
It’s also possible to remove yourself from a joint bank account without closing it. All account holders need to agree to any changes in the account’s ownership, though. You may both need to be present at a bank to request these changes.
Frequently asked questions
Generally, no. Banks require that both account holders consent to closing the account. It may be possible in some cases for one account holder to remove themselves from the account, though, without the explicit consent of both parties.
Some common reasons for closing a joint bank account include a divorce or separation of the account holders, one account holder was a child who no longer needs to rely on a joint account with a parent or the account was shared by business partners who no longer work together. Some other reasons include fees being too high, the account holders moved away from their local bank branch or the account was simply inactive.
The money in a joint bank account is owned by both account holders. They each have total access to funds in the account.
