Of individuals in relationships who have joint bank accounts with their significant other, 42% also maintain an individual account – but these decisions vary by generation, according to research released by TD Bank.
Lindsay Sacknoff, senior vice president, head of retail deposit products for TD Bank, notes that 65% of these joint holders use their joint account for rent and mortgage payments. ‘Couples should be sure to do their research and find an account that is aligned with their current circumstances,’ she explains.
The study, which is an extension of the TD Bank Checking Experience Index, surveyed more than 1,000 Americans who are either married or living with a significant other to explore how couples of all ages structure their bank accounts.Â Â
The survey revealed that couples who maintain individual accounts do so for a variety of reasons, ranging from independence, to convenience, to emergencies. The survey also identified generational distinctions including the fact that millennials (ages 18-34) are more likely to merge finances before marriage, relative to their older counterparts.
Of individuals in relationships who maintain separate accounts, 38% said they do so for independence, making it the top reason for holding individual accounts. Forty-three percent of women ranked independence as their top reason for keeping separate accounts, while only 34% of men said the same.
Of respondents who kept separate accounts, 28% said it was to ensure they had funds available for individual needs like emergencies and personal spending.
Sixteen percent of the total population noted convenience and ease of budgeting and paying bills as a reason to have separate accounts. Men were 38% more likely than woman to cite convenience as a reason for keeping separate accounts.
Only 7% of respondents cited privacy as a reason to retain an individual account.
Marriage is less likely to be the trigger for opening a joint account with millennials than with older populations. Only 70% of millennial couples waited until marriage to start a joint account, versus 88% of couples 55 and older, according to the TD Bank survey.
Twenty-six percent of millennials opened their first account when they were living with their partner (versus 9% of 55 and older), and 19% merged finances after being engaged (versus 6% of 55 and older).
When it comes how couples use their joint accounts, age plays a significant role, according to TD Bank. While 84% of millennials in relationships use their joint bank account for savings, only 66% of those ages 35-54 do so, and 68% of those 55 and older.
Of those ages 55 and older in relationships, 62% use their joint account for tax payments, with 47% for millennials and 52% for those ages 35-54.
‘When merging finances, it's a good idea stop by your local bank and have a conversation about what account options are the best fit for you and your partner's specific needs,’ adds Sacknoff. ‘Maintaining multiple accounts may offer better interest rates, and combining incomes in a joint account could mean access to premium benefits like reimbursement for out-of-network ATM costs.’