What Is a Share Account?

Share Accounts Explained

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A share account is a savings or checking account at a credit union. Share savings accounts pay variable dividends, the equivalent of a bank account's interest. Share checking accounts, called draft accounts, are liquid and meant for payments and everyday spending.

Definition and Examples of Share Accounts

A share savings account is an essential foundation account at a credit union. These accounts pay interest in the form of dividends on your savings, providing a safe place to store cash. 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.

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.

How Share Accounts Work

Credit unions are different from banks in that 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 help elect the board of directors. Generally, it doesn’t matter whether you have more or less money than anybody else in your account—every member is treated equally and gets one vote.


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.

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, so be sure to ask.

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.

Share Savings Accounts

Credit unions typically pay interest on your deposits in a share savings account in the form of dividends based on your share. 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. If you want to earn more and are willing to live with some restrictions, you can ask whether the credit union offers certificates of deposit (CDs) or money market accounts with higher rates.

Most share savings accounts don’t offer debit cards. You can move enough money into your checking account to pay bills and everyday expenses from that account.


Since the onset of COVID-19, you can withdraw or transfer funds at any time, and there remains no limit to the number of deposits you make into the account each month.

Share Draft Accounts

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.) This account is 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, a share draft account or a checking account is an excellent choice.

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 $250,000 limits.

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

Ask about cash-secured loans if you want to borrow against your savings.


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).

Other Types of Share Accounts

Familiarize yourself with several additional terms when you start using a credit union:

Certificates of Deposit (CDs)

Look for “share certificates” if you want to bump up your earnings. These will require money to be held on deposit for specific periods of time.

Retirement Accounts

Retirement accounts often refer to shares as well, but typical acronyms like “IRA” should help you recognize what type of account you have.

Key Takeaways

  • A share account at a credit union is the equivalent of a bank's savings or checking account and refers to the depositor's ownership stake.
  • Many (but not all) share accounts are insured for deposits up to $250,000.
  • Share accounts can be used as collateral for a loan.
  • The accounts can be set up individually or as joint ownership.


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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. MyCreditUnion.gov. "Share Insurance Toolkit for Consumers." Accessed Nov. 29, 2021.

  2. National Association of Federally-Insured Credit Unions. "Reserve Requirements and Regulation D; COVID-19 FAQs Available." Accessed Nov. 29, 2021.

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