Joint account overdrafts

(Richard Collins) #64

I have both Monzo and more recently Starling, and neither currently offer overdrafts on joint accounts. This seems to be common amongst most if not all “challenger banks” and it’s not clear why.

My partner and I have switched all DD’s and SO’s from our joint Smile/Co-Op account to our joint Monzo account, but the absence of an overdraft is proving to be problematic.

The irony is that even though we didn’t have instant notifications on our old account, we didn’t need them, because if we accidentally overspent one month our important payments would always be honoured and we would simply topup in our own time when we noticed we’d gone into the red. The small amount of interest was a small price to pay for the reassurance our important payments would always be honoured.

On the other hand, now we are using Monzo for everything we are 100% reliant on the instant notifications just to keep a daily check on our account and if we miss just one day of checking we can find a rejected direct debit or standing order the next day, even if we were only a few pounds short of the required amount.

This effectively means managing our finances has now become more difficult and stressful using Monzo than it was using our old account with an overdraft facility.

I am now regrettably transferring all DD’s and SO’s back to our old account and will continue to use Monzo for our everyday spending in the hope that overdrafts will someday come to joint accounts and we can transfer our DD’s and SO’s back again.

Not quite the revolutionised banking experience I was hoping to report, but I also appreciate that good things come to those who wait. So I will keep waiting.

However in the meantime I would appreciate some insight into why joint account overdrafts appears to be such a problem for these new “challenger banks”? What are we waiting for and who will be the first to crack it, or will it be once one has done it, all will do it?

Many thanks,
Richard

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(Splodf) #65

Joint accounts are still a really new product to Monzo Richard. Overdrafts will arrive shortly I’d imagine, when Monzo are happy the accounts are functioning 100% as intended.

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#66

There are two of you. They only have a system (for now) that manages overdrafts where there is only one person. That would be my guess.

Not what you asked, so just ignore if you would prefer. But if this is an issue it sounds like some time needs put aside to redo the budgets etc.? I do this every now and then so i never have to look at my account really as ill never run out of money that way.

(Splodf) #67

Here’s a novel idea.

Why not just put the correct amount of money you’ll need for the bills into the joint account?

(Rika) #68

Joint Account Overdrafts are an interesting one because you have to consider two credit files for the same, equal ownership account.

Not impossible but a challenge we haven’t yet taken on. I suspect that we’ll face a similar need to check multiple people for one account with business bank accounts and could combine the two pieces of work. :slightly_smiling_face:

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(Jack) #69

Hi Richard,

Thanks for sharing the post :slight_smile:
Hope you don’t mind but I’ve moved it to join an existing discussion in this area.

Enjoy the forum :+1:

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(Richard Collins) #70

Thanks Jack :smiley:

(Richard Collins) #71

Thanks Rika, makes sense. :smiley:

(Richard Collins) #72

@Codf - Thank you for your reply. I have moved from a bank account which has an overdraft to a bank account that does not have an overdraft. I am sharing my experience of such a move and how that has affected my day-to-day living.

My partner and I pay money into the joint account from our own sole accounts to keep it afloat, starting with the minimum amount required to cover fixed SO’s and DD’s and topping up when necessary and when funds allow to accommodate further variable spending for food shopping, etc.

The overdraft helps when we have not yet had a chance to topup after a recent shopping trip that may have used funds that a pending SO or DD requires, or to provide a buffer for a few days before our regular monthly payments go in after payday. We have a fee-free and interest-free overdraft up to £260 so this flexibility costs us nothing, but we would pay a small amount of interest if necessary (as would be the case with Monzo).

With all due respect, I am not interested in how other people in a similar situation get by without an overdraft or how they have had to adapt their day-to-day routines or cash flow arrangements to accommodate the loss of an overdraft, I am interested in when I can get the same facility I have got used to having elsewhere, and until all banks abolish overdrafts completely I would like to keep this facility as it helps my partner and I maintain our busy lifestyles in a less stressful and time consuming way. I assume with the subject of this discussion area being Joint accounts: overdrafts and CASS, other people feel the same way, for their own reasons.

Many thanks,
Richard

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(Richard Collins) #73

@Juggy69 - joint overdrafts can’t come soon enough, I’m with you on that! I’ve had two DD’s fail so far due to our balance being only a few £’s under the required amount, an unnecessary stress.

However they don’t appear to be high on their priority list, and other “challenger banks” don’t appear to offer them on joint accounts yet either. It seems they’re all finding it a challenge due to the fact the loan agreement is for two people and affects two credit profiles, whereas when it’s only one person it’s not an issue.

Fingers crossed they sort this out soon! :smiley:

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(Andrew) #74

I would very much welcome overdraft’s on current accounts - in fact overall parity needs to be the aim? We are #fullmonzo now and most of our DD’s are 28th of the month and the overdraft would take away the need to double check and move from pots if you’ve spent more than expected!

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(Matthew Green) #75

If I were doing joint overdrafts, I would enable the people to use a matched portion of their personal overdraft. So you both agree that £250 of your personal overdraft becomes a joint overdraft for your joint account. When you go overdrawn, the exact amount is split into two and apportioned equally to each person - this is done behind the scenes as it would just look like a very complicated mess otherwise.

If one person wants to lower/higher their overdraft, it has to be matched by the other person and only if you’re not using more of the overdraft than would be left. Reporting to credit files would be easy then as you owe half of the overdraft value each. If each user had a slider for how much of their overdraft they want to use on the joint account, it’s then matched with where the slider is for the other person. This would mean the overdraft can be instantly raised or lowered by just one person.

e.g. I have my slider set to £500, my wife to £250, our overdraft is matched at £250 each and is £500.
My wife decides £250 is too much so lowers it to £100, our overdraft is now £200.
My wife decides £100 is too low, raises it to £400 and now £800 is available.
I didn’t have to do anything. But maybe I get notified of the new limit.

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(#fullmonzo joint account since Aug18) #76

I would love Monzo to commit to this.

(#fullmonzo joint account since Aug18) #77

Joint Account CASS ‘Coming Soon’

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(Steve Chandler) #78

I almost wet myself when that notification came through on my phone.
Fingers crossed the overdrafts come soon after!

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(Emma (still not the app)) #79

Fingers crossed you’re closer to a toilet when it does happen

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(Steve Chandler) #80

:joy: Worth it

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#81

Can’t believe the official process is taking so long when the unofficial one has generally worked fine!

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#82

Once CASS is up and running, will we still need to both have a personal account with Monzo before setting up a joint one?

((╯°□°)╯︵ ┻━┻) #83

Yes :slight_smile:

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