Why Couples Should Maintain Separate Bank Accounts

NEW YORK (MainStreet) — Couples should maintain additional separate accounts even if they have joint bank accounts, financial experts said.

A recent survey conducted by TD Bank found that out of 1,000 Americans who are either married or living with a significant other, 42% of individuals in relationships that have joint bank accounts also maintain separate accounts. Many couples maintain separate accounts because they want to keep their independence with 38% of respondents who cited this as their top reason.

While both Gen-Xers (35-54) and Millennials (18-34) in relationships ranked independence as their top reason for maintaining individual accounts, each generation had different subsequent reasons. Gen-Xers said their number two reason was personal spending/emergencies, while the number two reason for Millennials was maintaining convenience.

Many couples use their account structure as a budgeting tool, said Lindsay Sacknoff, senior vice president and head of retail deposit products at TD Bank.

"According to the TD Bank survey, expenses like mortgage/rent, utility bills or groceries typically come out of a joint account, but each individual can have their own account for things like a night out, a shopping trip or impulse purchases," she said. "Besides budgeting, there are other benefits as some banks give account holders perks like higher interest rates if they maintain and link up multiple products."

The survey also found that Millennials are less likely to wait until marriage to join finances relative to their older counterparts. Only 70% of Millennial couples waited until marriage to start a joint account compared to 88% of couples 55 and older.

Merging finances can benefit couples in several ways. Combining incomes in a joint account could mean the ability to meet a minimum balance requirement that would offer access to benefits like a higher interest rate or reimbursement for out of network ATM costs, Sacknoff said.

Couples who consolidate accounts should maintain them at a single financial institution since it gives them the ability to review balances and transfer money from a mobile phone or computer, she said.