What a Share Savings Account Is

A share savings account is a savings account at a credit union. Credit unions call their deposit accounts "shares" because members who open accounts technically own a small piece of the credit union itself — you are a part-owner, not just a customer. The account works like a regular savings account: you deposit money, earn interest, and can withdraw when you need it. The main difference is that you are dealing with a credit union instead of a bank.

Credit unions are nonprofit organizations run by and for their members. Because they do not have to generate profit for shareholders, they often offer lower fees and better interest rates than banks do on the same type of account. Your deposits are insured the same way — up to $250,000 through the National Credit Union Administration (NCUA), which is the credit union equivalent of the FDIC.

Key Takeaways

  • A share savings account is a savings account at a credit union, and the name reflects that you own a small stake in the organization.
  • Credit unions typically charge fewer fees and pay higher interest rates than banks because they operate as nonprofits.
  • Your money is insured up to $250,000 through the NCUA, the same protection level as bank deposits have through the FDIC.
  • You must be a member of the credit union to open a share savings account, which usually means meeting an employment, location, or family requirement.
  • Interest rates and minimum balance requirements vary by credit union, so comparing a few options before opening is worth the time.

How Interest and Rates Work

Credit unions set their own interest rates on share savings accounts. Rates vary widely depending on the credit union, the size of your balance, and how long you agree to keep the money there. Some credit unions offer tiered rates — meaning you earn a higher percentage if you maintain a larger balance. Others offer the same rate regardless of how much you have saved.

Interest compounds, usually monthly or daily. That means the interest you earn gets added to your account, and then you earn interest on that interest in the next period. The more frequently interest compounds, the more you earn over time. When comparing credit unions, ask about both the rate and the compounding frequency.

Credit unions are required to disclose their rates and terms before you open an account. You can find this information on their website or by calling or visiting in person. Rates change over time, so the rate you see today may not be the rate you get six months from now.

Membership Requirements and How to Join

You cannot open a share savings account at a credit union unless you are a member. Membership requirements differ by credit union. Some credit unions serve people who work for a specific employer. Others serve people who live in a certain geographic area. Still others are open to family members of existing members or to people who work in a particular industry.

To find a credit union you can join, start with the CO-OP Network or Shared Branch locator on the Credit Union National Association website. You can search by your employer, your location, or your profession. Once you find a credit union that will accept you, you will need to complete a membership application. This usually takes a few minutes and can often be done online or in person.

Some credit unions charge a one-time membership fee, though many do not. A few require you to buy a share certificate or make a small deposit to become a member — often $5 to $25. After that, opening a share savings account is straightforward and usually free.

Minimum Balances and Fees

Minimum balance requirements vary. Some credit unions have no minimum at all. Others require you to keep $25, $100, or more in the account at all times. If your balance drops below the minimum, the credit union may charge a monthly fee, close the account, or both. Check the specific requirements before you open an account.

Share savings accounts at credit unions typically have lower fees than bank savings accounts. Many credit unions charge no monthly maintenance fee. Some charge a small fee only if you fall below the minimum balance or exceed a certain number of withdrawals per month. Federal rules once limited savings account withdrawals to six per month, but that rule was suspended — however, individual credit unions may still have their own limits, so ask.

Overdraft fees, inactivity fees, and early closure fees vary by credit union. Read the fee schedule before opening an account so you know what you might owe.

Share Savings Accounts Versus Share Certificates

Credit unions offer two main types of savings products: share savings accounts and share certificates (also called certificates of deposit or CDs). A share savings account lets you deposit and withdraw money whenever you want. A share certificate requires you to lock your money away for a set period — usually three months to five years — in exchange for a higher interest rate.

If you need access to your money, a share savings account is the right choice. If you have money you will not need for a while and want to earn more interest, a share certificate may pay better. Some people use both: they keep emergency money in a share savings account and put longer-term savings into a share certificate.

If you withdraw money from a share certificate before the term ends, you will pay an early withdrawal penalty. The penalty amount depends on the term length and the credit union's rules. Always ask about the penalty before you open a certificate.

How to Open and Use a Share Savings Account

Once you are a credit union member, opening a share savings account takes about 15 to 30 minutes. You can do it online, by phone, or in person. You will need to provide your name, address, Social Security number, and identification. The credit union will run a background check through ChexSystems, a banking history database, to verify you do not have a history of fraud or unpaid overdrafts.

After your account opens, you can deposit money by direct deposit, transfer from another bank, mobile deposit (taking a photo of a check), or in person at a credit union branch. You can withdraw money at any time by visiting a branch, using an ATM, or transferring to another account. Many credit unions participate in shared branching networks, meaning you can visit other credit unions' branches to make deposits or withdrawals without a fee.

You will receive a debit card or checkbook if you request one, though share savings accounts are not typically used for everyday spending — they are meant for saving. Some credit unions offer online and mobile banking so you can check your balance, transfer money, and manage your account from your phone or computer.

When a Share Savings Account Makes Sense

A share savings account is a good choice if you are a member of a credit union or can become one, and you want a safe place to save money with minimal fees. It works well for emergency funds, short-term savings goals, or money you want to keep separate from your checking account. Because credit unions often pay higher interest than banks, your money grows faster.

A share savings account is less useful if you cannot join any credit union near you, or if you need a checking account with debit card and check-writing features — for that, you would open a share draft account (the credit union version of a checking account) instead. It is also not the best choice if you have a large sum you will not touch for years; a share certificate would earn you more interest in that case.

Frequently Asked Questions

Is my money safe in a share savings account?

Yes. The NCUA insures deposits up to $250,000, the same way the FDIC insures bank deposits. If the credit union fails, you get your money back. Credit unions are also regulated and examined regularly to make sure they are operating safely.

Can I withdraw money from a share savings account anytime?

Yes, you can withdraw anytime without penalty. There is no lock-in period like there is with a share certificate. Some credit unions may limit the number of withdrawals per month or charge a fee if you exceed that limit, so check your credit union's rules.

What is the difference between a share savings account and a share draft account?

A share savings account is for saving; a share draft account is for everyday spending and works like a checking account. Share draft accounts come with a debit card and checkbook. Many people have both — they use the share draft for bills and purchases, and the share savings for building an emergency fund or saving toward a goal.

Do I need a job to join a credit union?

Not necessarily. Some credit unions require employment with a specific employer, but many serve geographic areas, families of members, or entire professions. Use the CO-OP Network locator to find credit unions you can join based on where you live, where you work, or who your relatives are.

Can I have a share savings account at more than one credit union?

Yes, but your NCUA insurance covers only $250,000 total across all your accounts at that same credit union. If you have accounts at multiple credit unions, each one insures up to $250,000 separately. Keep track of your balances to stay within the insurance limit at each institution.