What's In It for Us: 3 Ways Joint Accounts Work for Couples
What is the best way to manage your finances? It’s challenging enough to do this alone, and with your spouse, there are so many more factors to take into account! That’s because your decisions now have a ripple effect: How you spend your time and money will now impact others, and that impact lasts.
One of the best ways to begin this new chapter of life is with a joint account where both of you credit your salaries and dividends. But to really take charge of your finances in a joint account, you can't be just looking at salaries or dividends alone.
This is where this combination comes in handy: a joint account with individual DBS Multiplier Accounts. Building a life together involves a myriad of spending and savings choices. And the DBS Multiplier helps you take advantage of these choices, letting you unlock interest from paying your utility bills, charging to your DBS credit card to buy the anniversary gift, or in time to come, paying for the kid's tuition fees.
What is a joint account, and why choose one?
A joint account is similar to one that you may already have on your own – but with at least two people (or parties) having access to it. This type of account allows you to combine forces (and income) into growing your nest egg a little faster than you would on your own.
Advantages and disadvantages of joint accounts
There are many other advantages to this, including reducing the hassle of paying joint bills or transferring money to your spouse or partner. Having this overview also helps with budgeting and brings a new element of trust to any existing relationship. A joint account also prevents an individual from building up a personal credit line that may be detrimental in the long run.
Are there disadvantages? Some couples prefer to keep their finances separate, and cite privacy as one reason. If your relationship status changes, then the joint account may have to be unraveled. However, even in situations where couples are no longer together, these accounts can still be used to transfer larger sums between parties who are no longer under the same roof.
In the event of death, the joint account balance will be passed to the surviving owner. It’s even more straight-forward with a joint-alternate account, because all account holders can perform transactions independently.
Joint account vs. Joint-alternate account
When applying, you’ll have to choose between a “Joint account” and “Joint-alternate account”. With a “joint account”, all account holders must agree to all transactions. Whereas with a “joint-alternate account”, you can perform transactions independently, and do not need consent from the other account holders. (It’s probably polite to let them know though, to build trust and transparency!)
Benefits of a joint account with Multiplier account
#1: Bank your salaries and dividends into the joint account for higher interest
It is highly likely if you're thinking of a joint account, you could both be working and banking in regular paychecks. Opening a joint account helps build that transparency factor that helps couples build trust.
You can do this in a number of ways:
- Both contributing a fixed percentage;
- Crediting all your salaries and dividends; or
- Both putting in an amount each month to build up emergency cash or to invest.
Apart from the benefit of transparency, a joint account allows you to qualify for a higher interest rate on your total income (including dividends), when you each have a DBS Multiplier Account.
Here’s how it works: Bank your incomes into the joint account to qualify for higher eligible transaction tiers, and then transfer money from the joint account into your own individual DBS Multiplier Accounts. This is because the interest is based on the average daily balance in your DBS Multiplier Account.
You can still benefit even if you’re a gig economy worker, or are between jobs. Here’s how to meet the income criteria:
- Credit investment dividends into your DBS Multiplier, and
- Ensure that your dividends plus the cumulative amount you PayLah! at (physical) retail shops is more than S$500 for the month.
That’s because PayLah! retail spends are also counted for the first S$10,000 in your DBS Multiplier Account. And if your situation changes, your DBS Multiplier Account is smart enough to figure out the best route to higher returns for you and bae.
#2: Get more out of your spending with Multiplier
Starting a life together is likely to lead to additional payments, premiums and costs. For instance, life insurance, mortgage payments, utilities, groceries, among others. These are just some of the payments that you will have to make together. Why not make these payments give you something in return?
Under a DBS Multiplier umbrella, couples can add payments and purchases on their credit cards that could give you back even more in interest.
For the first S$50,000 in your DBS Multiplier Account from your salary and/or dividends, credit card transactions and insurance, the interest can be as high as 2.80% each year. Plus, if you add a home loan onto that, you’ll unlock a 3.8% p.a. interest on your next S$50,000 balance. This is all so long as your salaries are credited into the joint account, and you have your own DBS Multiplier Accounts. This would be one of the highest interest rates that you could earn in Singapore!
#3 Plan better for your life together
A survey from the United States said married couples fight about money (70%) more than anything else. In Singapore, money is among the top conflict-causing issues, according to The Asian Parent. The CPF savings website says a couple that manages finances well is a happy couple. The main sources of friction are debt, budgeting and random, frivolous purchases.
This is why married couples should have joint bank accounts: Having a joint account creates transparency (and builds trust), while helping you and your partner grow your little nest egg.
In addition, setting couple goals creates financial discipline, encouraging you to work within your budgets and save for something much bigger like a new house, the bucket list vacation in Machu Picchu, or more tuition classes for the kids as their major exams approach.
It’s easy to apply for DBS Multiplier and joint account
How do you open a joint account in Singapore? At DBS and POSB, everything is done online in a safe, secure manner. You never have to visit a branch if you don’t want to, fill in dozens of forms or make a thousand declarations after the one you've already made to the "one". You can even open a joint account if not married, which is so useful for wedding expenses and furnishing the marital home.
What do you need to open a joint bank account? Existing DBS/POSB customers can apply for My Account and eMySavings Account through your digibanking account. New DBS/POSB customers will need to submit a few more documents so you’ll want to prepare for that with this list.
A joint account, with all the benefits you gain through a DBS Multiplier, is one of the best ways to kick-start your savings journey and at the same time look to get something back through your spending.
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Deposit Insurance Scheme
Singapore dollar deposits of non-bank depositors and monies and deposits denominated in Singapore dollars under the Supplementary Retirement Scheme are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Monies and deposits denominated in Singapore dollars under the CPF Investment Scheme and CPF Retirement Sum Scheme are aggregated and separately insured up to S$75,000 for each depositor per Scheme member. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.