A shared bank or credit card account allows two or more people to have access to their shared funds. In most cases, funds in a joint account are owned jointly and severally. This means each account holder is entitled to all of the funds, as well as being liable for all of the debt on the account. Couples, close relatives and business partners typically use joint accounts.
Immediate steps
Unless notified to the contrary, a bank will allow any account holder to operate a joint account. If an account holder wants to make changes to an account because of a relationship dispute, a bank will move with caution. Before it can make the requested changes, it needs to contact, and get agreement from, each account holder.
A bank won't get involved in relationship disputes. Its responsibility is to protect the funds in an account while the account holders either work out their differences or decide to close the account. If the funds in the account are in dispute, the bank may well place a hold on the account, meaning no account holder can withdraw funds.
In the case of joint credit cards, the safest course is to ask the bank to suspend the account. Otherwise, the bank will require either full repayment of money owing on the card or the agreement of all account holders that one of them will take full responsibility for the debt before it will agree to make changes to the account or remove any holder's name from the account.
Stopping an account that is in daily or frequent use will almost inevitably cause complications. Account holders are responsible for ensuring that such deductions as automatic payments, direct debits and loan repayments continue after a stop is put on the account.
Longer-term steps
If the relationship has broken down irrevocably, the account holders need to decide what to do with the shared funds or debt and the future of the account. Try to reach an agreement on this and advise the bank. If no agreement is possible, contact the bank as soon as possible. It will offer advice on the future operation of the account. One possibility, if all account holders agree, is to allow regular automatic payments to continue, but to stop any other access until account holders reach a final agreement.
See our Quick Guide Account mandates for more about operating shared accounts.
If there has been a dispute about a joint bank account, notify the bank immediately, it can act to protect the funds until the dispute is resolved.
Bank closed joint account without approval of other account holder
Astrid had joint accounts with her partner. In late 2022, their relationship deteriorated to the point where she decided to leave the family home she shared with her partner and his children. Four days before Christmas, Astrid discovered her partner had closed a joint revolving credit facility she used to cover living expenses. She called the bank, and it apologised for not having checked with her, a joint account holder, before closing the account. It offered her compensation of $1,000. Astrid did not accept the offer. She complained that her partner’s actions were signs of financial abuse that the bank ought to have acted on. She also complained that the closure of the account had left her without any money. The bank increased its offer to $2,000, but Astrid was still not satisfied and asked us to investigate.
CASE 2Non-appearance of loan on records no basis for assuming it had been paid off
Erin and her husband took out a joint loan with their bank in 2018. During the next four years, they took out “top-up” loans and by November 2021 had five loans. In December 2021, Erin applied for a further “top-up” loan of $70,000 to undertake renovations on their house. The bank accepted the application and advanced $70,000 in February 2022.
CASE 3Bank entitled to take joint borrower’s funds to repay arrears
Caspian and an acquaintance took out a joint loan with the bank in 2007 to buy a rental property. In September and October 2022, they missed loan repayments, and the loan went into arrears. The bank contacted Caspian in November about the arrears, and he said repayments would resume once he found a tenant. He asked the bank not to contact the other joint borrower about the arrears.
Deceased customers' accounts
A bank will freeze a deceased customer’s individual accounts when notified of the death. This includes transactional accounts, term deposits, credit cards and loans.
Banks won’t necessarily know that a customer has died, so it is important to notify the bank as soon as possible. Anyone can notify the bank but typically this responsibility would fall on the next of kin or the estate representative…
Children's accounts
Children don’t have unrestricted use of bank accounts. Nor are they free to open bank accounts on their own. To do that, they need an adult’s involvement. The role of adults (usually the parents) is to decide what type of account would be best for the child. They also decide who can have access to the account.
The rules governing who can operate an account are set out in a document called an acco…
Closing accounts
A bank can end its relationship with a customer at any time, just as a customer can move to another bank at any time. A customer may move because a competitor offers a better deal or because the relationship with the bank is unsatisfactory or has broken down. A bank may decide to close a customer’s account because of how that person has been operating it, or because of regulatory requirements, or …
Updated December 2024