Share Draft Account
What Is a Share Draft Account?
A share draft account is a checking account offered by credit unions. The term reflects the cooperative structure of credit unions, where deposits represent ownership shares rather than traditional bank deposits.
Share draft accounts allow members to conduct everyday financial transactions.
Why It Matters
Share draft accounts provide credit union members with convenient access to their funds for daily spending and financial management. They function similarly to checking accounts while maintaining the credit union’s member-owned structure.
Members can use share draft accounts to pay bills, make purchases, and manage their finances.
How Share Draft Accounts Work
Members deposit funds into a share draft account and access the money through several methods:
- debit card purchases
- check writing (share drafts)
- ATM withdrawals
- electronic transfers
These accounts typically allow unlimited transactions.
Example
A credit union member using their debit card to pay for groceries from a share draft account is using their transaction account.
Share Draft Account vs Checking Account
- Share draft accounts are checking accounts offered by credit unions.
- Checking accounts are typically offered by banks.
FAQs About Share Draft Accounts
Do share draft accounts earn interest?
Some credit unions offer interest-bearing share draft accounts.
Are share draft accounts insured?
Yes, they are typically insured by the National Credit Union Administration (NCUA).
Can share draft accounts be accessed online?
Most credit unions provide digital access to these accounts.
Related Terms
