Share Account
What Is a Share Account?
A share account is a type of savings account offered by credit unions. Instead of holding deposits, credit unions describe account balances as “shares” because members own a portion of the cooperative financial institution.
Share accounts function similarly to traditional savings accounts at banks.
Why It Matters
Share accounts represent membership in a credit union. When someone opens a share account, they become a member-owner of the credit union and gain access to its financial services.
These accounts allow members to save money while participating in the cooperative structure of the institution.
How Share Accounts Work
When opening a credit union account, members typically deposit a small amount of money into a share account to establish membership.
Share accounts may offer:
- interest earnings
- deposit security
- access to additional financial services
- eligibility for credit union loans
Funds deposited into the account represent ownership shares in the credit union.
Example
A person joining a credit union may deposit $5 into a share account to establish membership.
Share Account vs Savings Account
- A share account is the credit union equivalent of a savings account.
- Savings accounts are offered by traditional banks.
FAQs About Share Accounts
Do share accounts earn interest?
Yes, many share accounts earn dividends.
Is a share account required for credit union membership?
Most credit unions require a share account to establish membership.
Are share accounts insured?
Credit union share accounts are typically insured by the NCUA.
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