Credit unions use different names for checking accounts depending on the institution

A checking account at a credit union is most commonly called a share draft account. This is the standard term across the credit union industry. Some credit unions also call them checking accounts or transaction accounts, but "share draft" is the legal and most widely used name. The term exists because credit union members are technically owners (shareholders) of the institution, so the account represents a share of the credit union rather than a deposit at a bank.

The practical difference between a share draft account and a bank checking account is minimal from a user perspective. You get a debit card, write checks, set up direct deposit, and pay bills the same way. The name difference reflects the credit union's ownership structure, not how you use the account day-to-day.

Key Takeaways

  • Credit unions call checking accounts "share draft accounts" because members own shares in the credit union rather than holding deposits.
  • You may also see the terms "checking account" or "transaction account" used by individual credit unions, but share draft is the industry standard.
  • A share draft account works identically to a bank checking account for deposits, withdrawals, checks, and debit card use.
  • The name reflects legal structure, not function — your day-to-day banking experience is the same regardless of what the account is called.

Why credit unions use the term "share draft"

Credit unions are member-owned cooperatives, not corporations with shareholders in the traditional sense. When you open an account at a credit union, you purchase a share (usually a small amount, often $5 to $25) that makes you a member-owner. Your checking account balance sits within that ownership structure, which is why it's called a share draft account — you're drafting against your share in the credit union.

Banks use the term "checking account" because customers are depositors, not owners. The legal distinction matters for regulatory purposes and how the institution is governed, but it doesn't change how you use the account. You still write checks, use a debit card, and receive statements the same way.

What you'll see on credit union websites and paperwork

When you search for a checking account at a credit union's website, you may find it listed under several names. Some credit unions prominently use "share draft account," while others label it straightforward as "checking account" for clarity. A few use "transaction account" or "NOW account" (negotiable order of withdrawal account, an older term that's less common now).

The account agreement or disclosure document you receive will specify which term the credit union uses. If you're unsure what to look for, calling the credit union directly and asking "What do you call your checking account?" will get you a straight answer. Staff will know when ready whether they use share draft, checking, or another term.

How share draft accounts compare to bank checking accounts

From a functional standpoint, a share draft account and a bank checking account are nearly identical. Both allow you to deposit money, write checks, use a debit card, set up automatic payments, and receive direct deposits. Both are insured — share draft accounts are covered by the National Credit Union Administration (NCUA) up to $250,000, while bank checking accounts are covered by the Federal Deposit Insurance Corporation (FDIC) at the same limit.

The main differences lie in fees and interest rates, which vary by institution and account type, not by the name. Some credit unions offer share draft accounts with no monthly fee and modest interest, while others charge fees similar to banks. You should compare the specific account terms at your credit union against other institutions, regardless of what the account is called.

Older and less common terms you might encounter

Occasionally you'll see credit unions use terms like "NOW account" (negotiable order of withdrawal) or "money market share draft account." NOW accounts are a historical category that allowed credit unions to pay interest on checking-like accounts; the term persists at some older institutions but functions identically to a standard share draft account. Money market share draft accounts typically require a higher minimum balance and may limit the number of withdrawals per month, but they're still checking accounts with different terms.

If you encounter an unfamiliar term on a credit union's website, the account disclosure will clarify what it includes — whether you can write unlimited checks, what the minimum balance is, and whether it earns interest. The name matters less than the features and fees.

How to find the right account at your credit union

Start by visiting your credit union's website and looking for a section labeled "Checking," "Share Draft," "Transaction Accounts," or "Personal Accounts." Most credit unions offer multiple versions of their checking account — a basic option with no frills, a premium option with higher interest or lower fees, and sometimes a student or youth version. The names vary, but the category will be clear.

Once you've found the accounts available, compare the monthly fee (if any), minimum balance requirement, interest rate, and debit card features. Call the credit union if the website doesn't make these details clear. You're looking for the account that matches how you bank — if you write few checks and want interest, a share draft account that earns a small rate might be best; if you need unlimited check writing and don't care about interest, a basic option works fine.

Frequently Asked Questions

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

Yes, functionally they are identical. "Share draft account" is the credit union industry term for what banks call a checking account. You use it the same way — writing checks, using a debit card, setting up direct deposit — but the name reflects the credit union's member-ownership structure.

Can I write checks on a share draft account?

Yes, most share draft accounts come with check-writing privileges. Some credit unions may offer a basic share draft account without checks, but the standard version includes them. Confirm the specific account's features on the credit union's website or by calling.

Do share draft accounts earn interest?

Some do, some don't — it depends on the credit union and the specific account type. Many credit unions offer a basic share draft account with no interest and a premium version that earns a small rate. Check your credit union's disclosure to see what rate, if any, applies to the account you're considering.

What if my credit union calls it something other than "share draft"?

That's normal. Some credit unions use "checking account," "transaction account," or other terms for marketing reasons. The name doesn't change how the account works. Look at the features and fees listed in the account agreement to understand what you're getting.

Is my money insured in a share draft account?

Yes, up to $250,000 through the National Credit Union Administration (NCUA), the same limit as FDIC insurance at banks. Your share draft account is insured the same way a bank checking account is.