Credit unions use the term "share draft account" instead of "checking account"
A share draft account is the credit union version of a checking account. It works the same way a checking account does at a bank — you deposit money, write checks or use a debit card to spend it, and the balance sits in your account until you withdraw it. The difference is only in the name, which comes from how credit unions are structured as member-owned cooperatives.
When you open a share draft account at a credit union, you are technically buying a "share" of the credit union itself, which makes you a member-owner rather than just a customer. The "draft" part refers to the ability to write checks against that share balance. Despite the different terminology, the account functions identically to a checking account at a traditional bank.
Some credit unions also call these accounts checking accounts in their marketing materials, especially if they want to make the product sound familiar to new members. You may see both terms used on the same credit union's website. The account you open will work the same way regardless of what it is called.
Key Takeaways
- A share draft account is a credit union's version of a checking account, with the same features: deposits, check writing, and debit card access.
- The term "share draft" reflects the credit union's cooperative structure, where members own a share of the institution rather than being customers of a corporation.
- Share draft accounts and checking accounts function identically — the difference is terminology only.
- Some credit unions use "checking account" in their marketing to avoid confusing new members unfamiliar with credit union language.
- Monthly fees, minimum balances, and check-writing limits vary by credit union, just as they do at banks.
Why credit unions use different terminology
Credit unions are structured as member-owned cooperatives, not corporations. When you open an account, you purchase at least one share of the credit union's capital. That share represents your ownership stake and your membership. A bank customer has no ownership; they simply have an account. A credit union member owns part of the institution.
The word "draft" comes from the legal concept of a negotiable instrument — a check is a written draft against your account balance. Combining the two terms, "share draft account" accurately describes what the account is: a place to hold your ownership share and from which you can write drafts (checks).
This terminology has been standard in the credit union industry for decades, though it confuses people who are used to bank language. Credit unions have gradually adopted "checking account" in everyday speech and marketing because it is more widely understood, but the formal product name remains "share draft account" in most credit union documents and disclosures.
What a share draft account includes
A share draft account typically comes with check-writing privileges, a debit card, online banking access, and the ability to set up automatic bill payments and transfers. You can deposit checks by mail, at an ATM, or through mobile deposit. You can withdraw cash at the credit union's branches or at ATMs in the shared branching network.
Most credit unions offer overdraft protection, which links your share draft account to a savings account or a line of credit. If you write a check or make a debit card purchase that exceeds your balance, the credit union can cover the difference automatically. This protection usually costs nothing if you do not use it, but you pay a fee each time an overdraft occurs.
Interest rates on share draft accounts vary widely. Some credit unions pay a small amount of interest on the balance; others pay nothing. Monthly maintenance fees also vary — some credit unions charge $5 to $15 per month, while others waive the fee if you maintain a minimum balance or set up direct deposit.
How share draft accounts differ from savings accounts at credit unions
A credit union savings account is also called a share savings account because you own a share of the credit union. The key difference is that a share savings account is designed for storing money long-term, while a share draft account is designed for frequent spending.
Share draft accounts allow unlimited check writing and debit card transactions. Share savings accounts typically limit you to six withdrawals per month (though this rule has been relaxed at many credit unions in recent years). Share savings accounts usually pay a higher interest rate than share draft accounts because the credit union expects the money to stay in the account longer.
Many credit union members keep both accounts: a share draft account for bills and everyday spending, and a share savings account for emergency funds or goals. The two accounts are separate, and you transfer money between them as needed.
Opening a share draft account at a credit union
To open a share draft account, you must first become a member of the credit union. Membership requirements vary — some credit unions are open to anyone in a geographic area, while others require you to work for a specific employer, belong to an organization, or have a family member who is already a member.
Once you are a member, you can open a share draft account in person at a branch, online, or by phone. You will need to provide identification, proof of address, and your Social Security number. The credit union will run a ChexSystems check, which is a banking history report similar to a credit report. If you have a history of overdrafts or fraud at other banks, you may be denied or required to use a second-chance checking program.
Most credit unions fund your first share (usually $25) from your initial deposit. You can then begin writing checks and using your debit card immediately, though there may be a delay before checks you deposit clear.
Fees and features to compare
Share draft account terms vary significantly between credit unions. Before opening an account, compare the monthly fee (if any), the minimum balance required to waive the fee, overdraft fees, and whether the credit union pays interest on the balance.
Check how many branches and ATMs the credit union operates, and whether it participates in shared branching networks or surcharge-free ATM alliances. Some credit unions belong to CO-OP Network, which gives members access to thousands of ATMs nationwide. Others use Allpoint or MoneyPass. If you travel or move frequently, network access matters.
Ask whether the credit union offers mobile check deposit, bill pay, and person-to-person transfers. These features are now standard at most credit unions, but some smaller institutions may not offer them. Also ask about overdraft protection options and whether the credit union charges a fee to link accounts for overdraft coverage.
Frequently Asked Questions
Is a share draft account the same as a checking account?
Yes, functionally they are identical. The only difference is the name. Credit unions call them share draft accounts because members own a share of the credit union, while banks call them checking accounts because the customer is not an owner. You write checks, use a debit card, and manage money the same way in both.
Can I use my share draft account debit card everywhere a checking account debit card works?
Yes. A share draft account debit card works at any merchant that accepts Visa, Mastercard, or Discover, depending on which network your credit union uses. There is no difference in where you can spend the money.
Do I have to keep a minimum balance in a share draft account?
It depends on the credit union. Some waive monthly fees if you maintain a minimum balance (often $500 to $1,000), while others charge a flat fee regardless of balance. A few credit unions have no monthly fee at all. Check your credit union's fee schedule before opening the account.
What happens if I close my share draft account?
When you close a share draft account, the credit union refunds your share (usually $25) to you. If you have other accounts at the credit union, your membership continues. If you close all accounts, your membership ends and you are no longer an owner of the credit union.
Can I write checks from a share savings account instead?
No. Share savings accounts do not come with check-writing privileges. If you need to write checks, you must open a share draft account. Some credit unions allow you to transfer money from savings to draft instantly online, so you can keep most of your money in savings and move it to draft as needed.