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Single, Joint Accounts or Both? How New Couples Should Bank

NEW YORK (TheStreet) -- For many, merging lives via marriage or other long-term commitment means merging everything, bank accounts included. Then again, others prefer the "his, hers and ours" approach. Which is best?

It turns out that many couples prefer to keep independent checking, savings and money market accounts even if they use joint ones for things they share, including mortgage payments and other household expenses. 

A TD Bank survey of 1,000 couples that had joint bank accounts found 42% also maintained individual accounts. Among those with both, 38% cited a desire for independence as a top reason. That was more pronounced among women, with 43% citing independence versus 34% of men.

Some 20% said individual accounts ensured they had money available for emergencies and personal spending, while 16% citied convenience for such things as budgeting and bill paying. Few, it appeared, use individual accounts to hide spending from partners, as only 7% said privacy was a top goal.

OK, so that's what many do, but what should they do?

Holding big assets jointly, such as home or investment accounts, can involve some complex issues, especially if the co-owners are not married. But when it comes to simple banking, such as checking accounts for routine spending and expenses, any system is fine if both partners are comfortable with it. That assumes the account balances are modest -- enough, for example, to get through the month. So if one were to go on a gambling spree, it wouldn't be all that devastating to the other.

But if the sums aren't very big, what's the point in maintaining multiple accounts?

The independence cited by so many of those surveyed can cover a variety of benefits that really boil down to reducing points of friction. No one likes to have another, even a loved one, look over one's shoulder, second-guessing every spending decision.

With multiple accounts, you can use the joint one for expenses that you've agreed to share, with each party contributing a given sum every week or month. Then each can use the individual account for the things that aren't shared -- clothing or lunches out -- things that really shouldn't require the other's approval. This way, splurging on a personal expense will not cause an ugly surprise in the joint account.

If the joint account is reserved for expenses that are fairly predictable, like the groceries, insurance and utilities, you can each deposit a fixed sum at a regular interval and minimize annoying conversations about money.

In fact, some couples try to reduce direct conversations about money to near zero. If the joint account is running low, you can make a deposit and text or mail to ask your partner to match it. With access online or through a smartphone app, you can transfer cash easily from one account to another. And you can choose whether each partner can see activity in all three accounts or just the joint account and his or her individual account.

In describing its survey findings, TD Bank recommends that couples talk with the bank about the best way to set up this multi-account system, especially if it involves savings aside from simple checking. With the right mix, you can minimize fees and maximize interest earnings, and perhaps get benefits such as reimbursement for out-of-system ATM use.

Of course, you could keep your individual accounts at separate banks. That might seem like a simple option when two people just getting together already have individual accounts at different banks. But moving money among accounts will probably be quicker and easier if all the accounts are at one institution.

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