You have just moved in with your significant other. One of the things you probably will be managing together is your finances. But while a joint account might seem like a practical idea, it is not an option for South Africans.

“Joint accounts are not allowed by SARS and therefore banks do not offer them for individuals,” says Philippa Weimer, head of transactional products at Nedbank.

What to do instead

If two individuals wish to share their finances, the route to follow will be for the account to be opened in the name of one person. That person provides a mandate on the account for the other individual to have access or usage rights.

Normally banks issue a supplementary card to the person who has been authorised to share the account. However, there are limitations to how much access that person has. For instance, with some banks only the primary cardholder can update the limit.

Benefits of a shared account

Sharing a bank account is a convenient way to manage your finances with your significant other. For instance, it would be easier to:

  • Save for a common goal
  • Budget for groceries
  • Pay your rent or even school fees

If only one party is the breadwinner, there is no need to transfer money to the other partner’s account as there is only one account.

It can strengthen the relationship because when there is transparency, people tend trust each other more.

Disadvantages of a shared account

  • The account holder may at any time revoke the mandate on their account for the other person to use the account.
  • One party may be at risk of losing their money as the law sees the funds as those of the primary account holder.
  • It could be very difficult if one party is an over-spender.

 What is the process of opening the account?

  • Both parties need to visit a bank of their choice.
  • One party is nominated as the account holder and signs a mandate for the other party to use their account.
  • Both individuals need to provide their ID and proof of residence and the bank will have to validate these documents for both parties.

This article has been prepared for information purposes only and it does not constitute legal, financial, or medical advice. The publication, journalist, and companies or individuals providing commentary cannot be held liable in any way. Readers are advised to seek legal, financial, or medical advice where appropriate.