A credit union checking account is called a share draft account
A share draft account is the formal name for a checking account at a credit union. The term exists because credit union members are technically owners—shareholders—rather than customers. When you open an account, you buy at least one share of the credit union itself, which is why the account carries the word "share" in its name. A share draft is the document you write to withdraw money from that account, similar to a check at a bank.
Some credit unions use the term interchangeably with "checking account" in their marketing materials, so you may see both names on their website or in conversations with staff. The mechanics work the same way: you deposit money, write drafts (checks) against it, set up automatic payments, and receive a debit card. The name is simply a legal distinction that reflects your ownership stake in the institution.
A few credit unions have started calling them "draft accounts" or simply "checking accounts" to reduce confusion, but "share draft account" remains the official term in credit union bylaws and regulatory filings. If you are unsure what to call the account you are opening, ask the staff member directly—they will know what you mean either way.
Key Takeaways
- A share draft account is a credit union's version of a checking account, named because you own a share of the credit union itself.
- The "draft" part refers to the checks you write against the account, which are technically called share drafts rather than checks.
- Share draft accounts work the same way as bank checking accounts: you can deposit money, write drafts, set up automatic payments, and use a debit card.
- Credit unions may use "checking account" and "share draft account" interchangeably in everyday conversation, though share draft is the formal term.
- You must purchase at least one share of the credit union to open any account, which is why the ownership language appears in the account name.
Why the name is different from a bank checking account
Banks call them checking accounts because you are a customer depositing money in an institution you do not own. Credit unions call them share draft accounts because the structure is fundamentally different: you become a member-owner the moment you open an account. That ownership stake, however small, is represented by your purchase of at least one share of the credit union's stock.
The word "draft" comes from the legal term for a written order to pay money—which is what a check is. At a bank, you write a check. At a credit union, you write a share draft. The distinction matters in regulatory filings and bylaws, but in daily use, most people simply say "I am writing a check" regardless of whether they bank at a credit union or a traditional bank.
How a share draft account works in practice
Opening a share draft account requires the same basic steps as opening a checking account anywhere else. You provide identification, proof of address, and an initial deposit (usually $25 to $100, depending on the credit union). The credit union uses part of that deposit to purchase your first share. The remainder becomes your account balance.
Once the account is open, you receive a debit card and checkbook. You can deposit paychecks, transfer money between accounts, set up automatic bill payments, and withdraw cash at ATMs. Most credit unions offer online banking, mobile apps, and the same fraud protections you would find at a bank. The share draft account functions identically to a checking account—the name is the only real difference.
If you close the account, the credit union will refund the value of your share (usually the original $25 to $100) along with any remaining balance. Some credit unions pay dividends on shares, though the rate is typically very low.
Share draft accounts versus savings accounts at credit unions
Credit unions also offer savings accounts, which are called share savings accounts. The difference is the same as at a bank: a share draft account is for frequent transactions and typically earns little to no interest, while a share savings account is meant for money you are setting aside and usually earns a small dividend (the credit union equivalent of interest).
You can have both accounts at the same credit union. Many members keep a share draft account for daily spending and a share savings account for an emergency fund or short-term goals. The share savings account also requires you to own at least one share, so the ownership structure is identical—only the purpose and interest rate differ.
Fees and features to compare
Share draft accounts vary by credit union, just as checking accounts vary by bank. Some credit unions charge monthly maintenance fees; others waive them if you maintain a minimum balance or set up direct deposit. Overdraft fees, out-of-network ATM fees, and check-printing costs differ from one institution to another.
Before opening a share draft account, ask the credit union about its fee schedule, ATM network access, and online banking features. Many credit unions participate in shared branching networks and surcharge-free ATM networks, which can give you access to thousands of locations nationwide—often more than a single bank offers. Compare these benefits against the specific terms of the account you are considering.
Frequently Asked Questions
Is a share draft account the same as a checking account?
Yes, functionally they are identical. A share draft account is simply what a credit union calls a checking account. The name reflects the fact that you own a share of the credit union, but the account works the same way: you deposit money, write checks (or drafts), use a debit card, and pay bills.
Do I have to buy a share to open a share draft account?
Yes. You must purchase at least one share of the credit union to become a member and open any account. The share typically costs $25 to $100, and the credit union usually deducts this from your initial deposit. You own that share for as long as you are a member.
Can I write checks on a share draft account?
Yes. Checks written on a share draft account are technically called share drafts, but they work exactly like checks from a bank. You receive a checkbook when you open the account, and you can order more checks through the credit union.
What happens to my share if I close the account?
When you close a share draft account, the credit union refunds the value of your share (the original purchase price, usually $25 to $100) along with any remaining account balance. Some credit unions may also pay out any accumulated dividends on the share.
Do share draft accounts earn interest?
Most share draft accounts earn little to no interest, similar to checking accounts at banks. If you want to earn dividends on your money, open a share savings account instead, which is the credit union equivalent of a savings account.