Should You (Legally) Open Some pot Savings Account Together with your Spouse?

 Should You (Legally) Open Some pot Savings Account Together with your Spouse?

Let's be clear on one thing: When it comes to planning your individual finance matters as a couple, there is no one right solution for everyone.

As adults, most of us have many financial responsibilities in everyday life that we have to look after. Some people might have to personally support our elderly parents as a single child while our spouse may not need. What works for couple friends of ours may not necessarily be the best solution to live in. Hence, every couple will have to figure out what is the best way on their own.

One of the ways shared financial expenses and goals can be accounted for like a couple would be via a joint checking account. Some pot checking account is sort of a regular savings accounts – with the only notable difference being that it's held under two persons name.

This means both you and your joint account holder (for this article we are going to presume here's your spouse) will have equal claim within the savings in this account. Both of you can legally withdraw funds out of this account and use it in the manner you deem fit, while not having to seek approval in the other person.

Why Would Couples Want To Open A Joint Savings Account?

Friends that you speak to or articles that you read will claim that a joint savings account is essential if you'd like to take your relationship the next stage.

However, for this article, we'll go one step further in exploring what are the actual reasons why you would want to open some pot savings account with your spouse, or you even need one out of the initial place, beyond just attempting to demonstrate your commitment within the relationship.

# 1 Shared Household Expenses

When you live together, you will find yourself incurring many shared expenses as a couple or as a family. These include utility bills, telecommunication bills, conservancy charges, grocery expenses, transport cost and monthly home mortgage repayments.

A joint checking account can be used to pay for these shared household expenses. The couple may then contribute equally, or a proportion they agree with, towards the checking account which will be accustomed to purchase shared household expenses.

# 2 Savings Goals

The other way a joint savings account is useful, is perfect for couples in order to save up towards financial targets that they have set for themselves.

For example, if your couple promises to upgrade their home in five years, they may wish to start setting aside some cash every month in their joint checking account to operate towards this goal. They could also make saving up for an early retirement their priority and save diligently towards it.

Similar to why we think it's important to have multiple savings accounts, you should also are aware of the reasons why you would want a joint savings account together with your spouse. Do you need this account to cover shared household expenses? Or are you currently utilizing it to save up towards financial targets that both of you have decided on?

This is an important question to ask yourself since the reason behind it would see whether 1) you and your spouse really need to open a joint savings account legally, or 2) whether you are better off designating one of your personal savings accounts as your de facto joint checking account.

Using Your Personal Checking account Like a De Facto Joint Savings Account

There are a couple of reasons why you may be best designating one of your personal checking account as the de facto joint checking account.

No good joint savings account: The first reason to use a personal checking account, instead of legally opening a joint savings account, is the fact that you will find very few good joint savings accounts in Singapore for you to select from. This is in contrast to personal savings account, where there are many high quality ones to select from such as the OCBC 360, UOB One Account and also the DBS Multiplier.

For example, if your intention is by using the joint savings account to pay for household bills, you'd be best utilizing a personal checking account that earns you bonus interest in your savings if you were to pay bills via GIRO using the account (e.g. UOB One Account).

Higher interest: Most joint savings account in Singapore give a measly interest of 0.05% per year, that is almost not a good way that you should be growing your savings. On the flipside, there are many personal high-interest savings accounts that earns you higher rates of interest. While some of these accounts would want you to definitely hit minimum requirements every month, you can also consider savings accounts that gives you a decent interest without having to jump through any hoops.

Why You May Want To Legally Open Some pot Savings Account With Your Spouse

While we've highlighted some of the explanations why you might want to designate a personal savings account as the de facto joint checking account, there's also good reasons why you may decide to legally open a joint savings account with your spouse.

Right of survivorship applies: What what this means is is the fact that in the event that a joint account holder passes on, the savings in the joint-account automatically is one of the surviving account holder. This is good if a joint checking account is meant for shared household expenses, you'd, because the surviving spouse, be able to continue using the savings in this account to pay for household expenses.

In contrast, if your personal checking account is serving as your de facto joint checking account, what it means is that your spouse won't have full claim that they can the savings in the account in the event that you spread based on the intestate succession act. This means the account will be frozen until an executor is appointed and distributes the savings in the account.

Saving towards shared financial targets, or else: Your spouse and you may have plans to work towards early retirement, or any other shared financial targets that you simply have. When one of you passes on, the funds in your joint savings account will automatically fit in with your partner, rather than it being disbursed to other members of the family just like your parents or children.

But let's say the connection doesn't work out?

If that occurs, some pot checking account would also imply that the two of you have equal claims to the savings within the joint-account. However, if your “joint savings account” is a personal checking account held under your spouse's name, which means that the savings legally is associated with him/her only, unless you can prove otherwise that it's a matrimonial asset.

If You Choose To Get A Joint Checking account, Make Sure You Get One which Gives You Decent Interest

Most joint checking account in Singapore gives a pursuit of just 0.05% per annum. This may not matter much if your joint checking account is typically used to pay for shared household expenses and wouldn't cash savings left after every month.

However, should you and your spouse are saving up towards upgrading a house and curently have $200,000 inside your joint savings account. At 0.05% per year, you would earn only $100 each year in interest. This isn't good enough.

Instead, you should choose a joint checking account that allows you to earn decent interest. An example will be the CIMB FastSaver Account, which provides you 1.00% in your first $50,000 in savings, 1.50% on savings between $50,000 to $75,000 and 0.60% on any amount above $75,000. Which means that if you keep $200,000 in savings inside a joint CIMB FastSaver Account, you will earn $1,625 in interest every year.

So choose your joint checking account wisely should you as well as your spouse would like to save a sizable amount of cash together.

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