What Is a Share Draft?

Share Draft Explained

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A share draft, or share draft account, is a checking account at a credit union.

A share draft, or share draft account, is a checking account at a credit union. Let’s take a closer look at what a share draft is and how it works so you can determine if having one makes sense for your situation.

Definition of a Share Draft

If you open a checking account at a not-for-profit credit union rather than a bank, you’ll probably come across the term “share draft account.” Because you are a member of the credit union, you are a partial owner or shareholder of it. The “share” in share draft account reflects that ownership.

Shares are federally insured by the National Credit Union Share Insurance Fund, administered by the National Credit Union Administration (NUCA), up to $250,000. You can use a share draft account to write checks, pay your bills, and  make everyday purchases.

  • Alternate names: Share draft account, share draft checking account


A share draft at a credit union is essentially the same as a personal checking account at a bank.

How a Share Draft Works

Share drafts vary from credit union to credit union. In most cases, however, they offer many conveniences. You may be able to write as many checks as you’d like for free and receive overdraft protection. Other services can include automatic deposits, online bill payments, 24-hour account access, and monthly statements.

While many checking accounts at banks have minimum balance requirements and service charges, share drafts usually do not. Depending on the credit union you choose, you can enjoy the same perks as a checking account without the fees.

If you open a share draft account, you may also apply for a debit or ATM card. In most cases, you’ll have unlimited free access to the credit union’s ATMs so you can withdraw cash whenever you need it. Credit unions also offer business share draft accounts that work a lot like personal share draft accounts.


Many credit unions require a minimum deposit to open a share draft account, but usually, it’s not too high.

Share Draft Accounts vs. Checking Accounts

Even though share draft accounts and checking accounts have a lot in common, there is a key difference between them. Unlike many checking accounts at banks, share draft accounts at credit unions pay interest—referred to as dividends—on the money deposited into them.

Between 1933 and 2011, checking accounts in the U.S. were not permitted to earn interest. However, because this prohibition is no longer in effect, some bank checking accounts now accumulate interest. Also, bank checking accounts usually come with savings accounts that may earn interest as well.

Another notable difference between share draft accounts and checking accounts is that share draft accounts tend to be more affordable. With a share draft account, you probably won’t have to worry about a minimum balance or pay to maintain the account.


While a share draft account offers a few advantages over a checking account, you do have to join a credit union to take advantage of one.

Pros and Cons of Share Draft Accounts

  • No minimum balance requirements

  • Can earn interest

  • Must join a credit union

  • Will need to make a minimum deposit

Pros Explained

  • No minimum balance requirements: As share draft accounts don’t usually require a minimum balance, you can open one without ever worrying about how much money is in your account.
  • Can earn interest: Even though the interest on share draft accounts probably won’t be significant, it can help you earn a bit of extra cash without much effort.

Cons Explained

  • Must join a credit union: A share draft account won’t be an option for you unless you join a credit union. The good news is that many credit unions have lenient membership requirements.
  • Will need to make a minimum deposit: In addition to joining a credit union, you’ll have to deposit a nominal amount of money into a share draft account in order to open it.

There are countless share draft accounts available, so it’s a good idea to do your research and shop around to find the best option for your situation and needs.

Key Takeaways

  • Also sometimes known as a share draft account, a share draft is a checking account at a credit union.
  • Generally speaking, a share draft account features benefits like automatic deposits, overdraft protection, and online bill payment.
  • Compared with most bank checking accounts, share draft accounts earn interest and don’t come with minimum balance requirements or service charges.
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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. National Credit Union Administration. "Share Insurance Fund Overview." Accessed Oct. 14, 2021.

  2. Federal Reserve System. "Prohibition Against Payment of Interest on Demand Deposits." Accessed Oct. 14, 2021.

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