Investing together: What couples need to know about joint investment accounts

Whether you’re married or in a registered partnership, saying ‘I do’ also means taking financial responsibility for your shared future. If you want to build wealth over the long term, you can invest in shares and ETFs together – for example through a joint investment account.

What is a joint investment account?

If you and your partner want to invest in shares or ETFs, you can open an investment account with two account holders at your bank or other financial services provider. A joint investment account works in much the same way as a joint current account. You can choose whether both account holders must approve transactions or whether either account holder can act independently.

In practice, the first option is usually less convenient because it means that both account holders must approve every transaction. If you want to access the account or make a transaction, your partner must also approve it. Where markets are highly volatile, this can make it more difficult to react quickly if the other person is unavailable. At the same time, this model offers one advantage: Both account holders are always kept informed about all activity on the account.

The second option is far more common, allowing both account holders to access the account independently and buy or sell shares and ETFs on their own.

Manage your investments together and save costs

A joint investment account allows you to manage your investments together. For example, if one partner falls ill, the other can continue to make investment decisions on their behalf. You can often save on account fees and transaction costs for buying and selling securities.

Clear tax rules also apply here: For tax purposes, assets held in a joint investment account are generally treated as jointly owned by both account holders. If both partners contribute equal amounts and withdrawals are made exclusively to a joint account, ownership is clearly established. In this case, no additional arrangements are usually required.

However, a joint investment account is not automatically the best solution for every personal or financial situation.

When individual investment accounts may be a better option

If you and your partner invest different amounts, separate investment accounts are often the better choice. This creates clarity about ownership and can help avoid disputes at a later stage.

You should also bear in mind that gift tax may be due in some circumstances: For married couples and registered civil partners, the tax-free allowance is 500,000 euros over a ten-year period.

If one partner contributes significantly more assets to a joint investment account, half of the excess amount may be treated for tax purposes as a gift to the other partner.

Separate investment accounts can also provide greater clarity when it comes to inheritance. If one account holder dies, their share of the investments will be distributed in accordance with the rules of intestate succession or the provisions of a will. If there are additional heirs besides the surviving partner, separate investment accounts can help avoid disputes about who owns which investments or who originally contributed which assets.

In addition to ownership and inheritance issues, couples should also take tax allowances into account.

Don't forget your joint exemption order

It is also important to set up a joint exemption order (Freistellungsauftrag).

Married couples and registered civil partners who file a joint tax return can use it to exempt investment income of up to 2,000 euros per year from tax. No withholding tax is charged on income up to this amount.

Individual exemption orders of 1,000 euros each do not apply to joint investment accounts. However, couples can also submit a joint exemption order for individual accounts or investment accounts held in the name of only one partner.

And by the way, you can amend or resubmit your exemption orders at any time. It is also worth reviewing them once a year before the end of the year to check whether your tax allowances are allocated optimally across your accounts and investment accounts.