What Is a Share Account?

Your Account Equals Ownership

Credit union branch

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In the world of banks and credit unions, a share account is an account at a credit union. Share savings accounts pay dividends, similar to interest from bank savings accounts while share checking (or “draft”) accounts are liquid accounts for payments and everyday spending.

Share Savings Accounts

A share savings account is an essential account at a credit union. These accounts pay interest on your savings, providing a safe place for you to store cash. Plus, opening a share account is necessary to establish your membership in the credit union, which enables you to use other products like loans, checking accounts, and more.

If you’re familiar with savings accounts at banks, you already understand the basics of a share savings account. The terminology is different because you open your account through a credit union, but the way you use the account is the same.

Interest earnings: Credit unions typically pay interest on your deposits in a share savings account. Depending on interest rates in general (and how much the credit union wants to compete for new deposits), the rate you earn might be high or low. Still, every little bit helps. If
you want to earn more and you’re willing to live with some restrictions, you can ask if the credit union offers certificates of deposit (CDs) or money market accounts with higher rates.

Access to funds: You can withdraw funds from a share savings account any time you want, but there are restrictions on certain types of withdrawals. If you use an ATM, visit the credit union in person (including shared branching locations at other credit unions), or have checks mailed to you, you can withdraw as frequently as you want. However, a savings account is not for everyday spending. Federal law (Regulation D) limits certain transfers out of a savings account to six per month. Limited withdrawals include:

  • Checks you write on the account (but not checks payable to you from the credit union)
  • Spending with a debit card
  • Online bill payment and ACH payments
  • Transfers to your checking account

To prevent problems and confusion, most savings accounts don’t offer debit cards. Most people do just fine with six transfers per month. Just be sure to move enough money over to your checking account and spend from there.

While transfers out of the account are restricted, there is no limit to the number of deposits you make into the account each month.

A safe place: Your share savings (or checking) account is a safe place to keep your money. Instead of keeping cash at home or carrying it around, it stays with the credit union. Verify that your deposits are fully insured and that you’re below the maximum dollar limits.

Collateral: Funds in your share savings account can sometimes function as collateral for a loan. This strategy will help you build credit (whether it’s for the first time, or you’re rebuilding
after some difficulties). Ask about cash secured loans if you want to borrow against your savings.

Share Draft = Checking

A share draft account is a liquid account at a credit union that allows you to make frequent withdrawals and payments. If you’re familiar with checking accounts, share draft accounts are essentially the same. Again, the only difference is that a “share” account is at a credit union instead of a bank.

Access to funds: With a share draft account, there are generally no limits on how often you use the account (one exception might be a business doing numerous transactions every month). These accounts are a good place for your everyday spending money. If you write a
check, purchase something with a debit card, withdraw cash from an ATM, or pay bills online (whether your biller pulls the funds or you set up the payment with your bank), a share draft account or a checking account is an excellent choice.

The term "draft" is a historical term referring to checks drawn against funds in the bank, but you can think of it as money leaving the bank or credit union.

Interest earnings: Most checking accounts do not pay interest. However, some credit unions offer reward checking and interest checking accounts, which allow you to earn interest.

Other Types of Accounts

You might want to get familiar with several additional terms when you start using a credit union. For Certificates of deposit (CDs), look for “share certificates” if you want to bump up your earnings. Retirement accounts often refer to shares as well, but typical acronyms like “IRA” should help you recognize what type of account you have.


Credit unions are different from banks because every account holder is an owner of the institution. As an owner, you have a voice in credit union management, and you can vote on various issues and the Board of Directors. Generally, it doesn’t matter if you have more or less money than anybody else in your account—every member is treated equally and gets one vote.

Besides the different structure (and language), there’s little difference between most banks and credit unions from a customer’s perspective. They offer more or less the same services, and your funds are just as safe in a federally-insured credit union as they are in an FDIC-insured bank account: Deposits are protected up to $250,000 per depositor, per institution. However, not all credit unions are federally insured.

It’s possible to insure more than $250,000 in a single credit union, depending on how you structure your accounts.

Not Necessarily a Joint Account

Don’t confuse a share account with a shared account (that you share with somebody else). The term "share" refers to your share of ownership in the credit union. Although you can have a joint share savings account, share accounts can also be individual accounts.

A share account is like most other bank accounts, but it exists at a credit union. These accounts establish your share of ownership and enable you to use credit union features.