A credit union checking account is called a share draft account

The checking account a credit union offers is called a share draft account. The name comes from how credit unions are structured: when you open an account, you become a member-owner, and your deposit is technically a "share" of the credit union rather than a deposit held by a bank. A share draft is the document you write to withdraw money from that share, which functions exactly like a check.

You will see this term on your account statements, in your credit union's fee schedule, and when you call customer service. Some credit unions use the terms interchangeably—calling it both a share draft account and a checking account—but "share draft" is the formal name that distinguishes it from a bank checking account.

The practical difference between a share draft account and a bank checking account is minimal for everyday use. You write drafts the same way you write checks, you can set up direct deposit and automatic payments, and you can use a debit card. The main distinction is legal and structural: you own a piece of the credit union itself, whereas a bank customer is a creditor of the bank.

Key Takeaways

  • A credit union checking account is formally called a share draft account because your money represents ownership in the credit union, not a deposit.
  • Share drafts function identically to checks and work with direct deposit, automatic payments, and debit cards.
  • Many credit unions use "checking account" and "share draft account" as synonyms in everyday language, though share draft is the official term.
  • The name reflects the credit union's cooperative structure, where members are owners rather than customers of a financial institution.

Why the name is different from a bank account

Banks and credit unions are organized differently under federal law. A bank is a for-profit corporation; when you open a checking account there, you are depositing money that the bank holds and lends out. A credit union is a cooperative; when you open an account, you are buying a share of the organization and becoming a member-owner.

Because your money represents ownership rather than a deposit, the document you use to withdraw it has a different name. A check is a written order to a bank to pay money from a deposit. A share draft is a written order to a credit union to pay money from your share. The Federal Credit Union Act and state credit union laws use "share draft" as the official term for this transaction method.

In practice, this distinction rarely affects how you use the account. Your share draft account will have a routing number, account number, and checks that work at any merchant or business that accepts checks. Direct deposit, bill pay, and debit cards all function the same way they do at a bank.

What appears on your statements and documents

When you receive your monthly statement from a credit union, the account will be labeled as a share draft account. Your checks may say "share draft" or "check"—this varies by credit union and by which check stock they order. Some credit unions print both terms on the check itself.

If you need to provide account information for direct deposit or wire transfers, you will use the same routing and account numbers you would at a bank. The person or organization receiving the information does not need to know whether it is a share draft account or a checking account; the routing and account numbers work the same way.

When you call your credit union's customer service line, you can ask about your "checking account" and staff will understand you when ready, even if the official account name is a share draft account. Most credit unions have moved toward using both terms in their customer-facing materials to avoid confusion.

Share draft accounts versus other credit union accounts

A credit union typically offers several types of accounts, and the share draft account is distinct from each. A savings account (sometimes called a share savings account) earns interest and is meant for money you are not spending regularly. A money market account usually requires a higher minimum balance and offers higher interest rates. A certificate of deposit (CD) locks your money away for a set term in exchange for a may provide interest rate.

The share draft account is the one designed for regular spending: paying bills, receiving paychecks, and making everyday purchases. It may earn a small amount of interest, depending on the credit union, but that is not its primary purpose. Some credit unions charge a monthly fee for share draft accounts if you do not maintain a minimum balance, while others offer them free to all members.

You can hold multiple accounts at the same credit union. Many members keep a share draft account for spending and a share savings account for emergency funds or goals, using each for its intended purpose.

How to open a share draft account

To open a share draft account, you must first become a member of the credit union. Membership requirements vary: some credit unions are open to anyone in a geographic area, while others require you to work for a specific employer, belong to an organization, or have a family member who is already a member. You can find out the membership requirements by visiting the credit union's website or calling their main number.

Once you confirm you are may be able to access for membership, you will need to provide identification (usually a driver's license or passport), proof of address (a recent utility bill or lease), and your Social Security number. The credit union will run a background check using ChexSystems, a system that tracks banking history and fraud. If you have a history of unpaid overdrafts or fraud at another financial institution, you may be denied, though some credit unions specialize in second-chance accounts.

After membership is approved, you can open the share draft account. You will choose whether to order checks, set up online banking and bill pay, and link a debit card. Most credit unions can have you set up and ready to use the account within a few business days.

Fees and features to compare

Share draft accounts vary in cost and features depending on the credit union. Some charge a monthly maintenance fee (typically $5 to $15) if your balance falls below a minimum, while others charge no monthly fee at all. Some waive the fee if you set up direct deposit or maintain a certain balance.

Overdraft fees also vary. If you write a share draft for more than your balance, the credit union may decline it (costing you nothing) or pay it and charge you an overdraft fee (typically $25 to $35 per overdraft). Some credit unions offer overdraft protection, which links your share draft account to a savings account or line of credit to cover overdrafts automatically.

Most credit unions offer free online banking, free bill pay, and free debit cards with share draft accounts. Some offer rewards on debit card purchases, though this is less common at credit unions than at banks. Compare the fee structures and features of credit unions in your area or that you are may be able to access to join before opening an account.

Frequently Asked Questions

Is a share draft account the same as a checking account?

Functionally, yes. A share draft account is a credit union's version of a checking account. You write drafts (checks) to spend money, set up direct deposit, and use a debit card. The name is different because of how credit unions are legally structured, but the account works the same way a bank checking account does.

Can I use my share draft account at any ATM?

Most credit unions participate in shared branching networks and ATM networks that let you access your account at other credit unions' ATMs and branches for free. Some credit unions are part of the CO-OP Network or Allpoint, which have thousands of ATMs. Check with your specific credit union about which networks they use and whether there are any fees for out-of-network ATM use.

What happens if I write a share draft and do not have enough money?

The credit union will either decline the draft (and you will not be charged) or pay it and charge you an overdraft fee. Some credit unions automatically link your share draft account to a savings account to cover overdrafts without a fee. Ask your credit union about their overdraft policy when you open the account.

Do I need to keep a minimum balance in a share draft account?

This depends on the credit union. Some require a minimum balance (often $25 to $100) to avoid a monthly fee, while others have no minimum. Check the fee schedule for the credit union you are joining to see what applies.

Can I get a debit card with a share draft account?

Yes. Most credit unions issue a debit card with share draft accounts at no cost. You can use it to make purchases and withdraw cash at ATMs. The card is linked directly to your share draft account.