A savings account at a credit union is called a share account
The account you open to save money at a credit union is called a share account. The word "share" comes from how credit unions are structured: when you deposit money, you own a share of the credit union itself. You are not a customer of a bank; you are a member-owner of a cooperative. That ownership stake is what makes it a share account rather than a savings account.
The practical difference is mostly in the name. A share account works the same way a savings account does at a bank — you deposit money, it sits there, and you earn interest on the balance. You can withdraw funds when you need them. The credit union pays you interest on what you hold, just as a bank does. But the legal structure underneath is different, and that is why credit unions use different terminology.
Some credit unions also offer share draft accounts, which are their version of a checking account. A share draft account lets you write checks and use a debit card, while a share account is for saving. The names reflect the same member-ownership principle — you own shares in the institution, whether you are using it to save or to spend.
Key Takeaways
- A share account is a credit union's term for a savings account, reflecting that you own a share of the credit union as a member.
- Share accounts function identically to bank savings accounts — you deposit money, earn interest, and withdraw when needed.
- Credit unions use "share draft account" to describe what banks call a checking account.
- The different terminology comes from credit unions being member-owned cooperatives rather than shareholder-owned banks.
Why credit unions use the word "share"
Credit unions are organized as cooperatives. When you join a credit union and open an account, you purchase at least one share of the credit union's ownership. That share typically costs between $5 and $25, depending on the credit union. The money you deposit into your share account is separate from that initial share purchase — it is the balance you are saving.
Because you own a piece of the credit union, you have voting rights on major decisions and you share in any profits the credit union makes. If the credit union has a strong year financially, it may return earnings to members through higher interest rates or lower fees. This is fundamentally different from a bank, where depositors have no ownership stake and no say in how the institution operates.
The terminology reflects this reality. Banks call accounts "savings accounts" because you are saving money with them. Credit unions call them "share accounts" because you are saving money as an owner of the institution. It is the same activity, but the legal relationship is different.
How share accounts compare to bank savings accounts
From a day-to-day perspective, a share account and a bank savings account work identically. You deposit money, the balance earns interest, and you can withdraw funds. Both are insured up to $250,000 by a federal agency — credit union share accounts are insured by the National Credit Union Administration (NCUA), while bank savings accounts are insured by the Federal Deposit Insurance Corporation (FDIC). The coverage limit and the protection are the same.
Interest rates on share accounts may differ from bank savings accounts, but not because of the name. Some credit unions offer higher rates because they have lower overhead costs or because they prioritize member returns. Others offer lower rates. The rate depends on the individual institution, not on whether it is a bank or a credit union.
The main practical difference is access. Not all credit unions have branches or ATMs in your area, so you may need to do most of your banking online or by phone. Banks often have more physical locations. If you need in-person service frequently, that matters more than what the account is called.
Share accounts and share draft accounts side by side
| Account Type | Credit Union Term | Bank Term | What It Does |
|---|---|---|---|
| Savings | Share account | Savings account | Holds money, earns interest, limited withdrawals per month |
| Checking | Share draft account | Checking account | Holds money, earns little or no interest, unlimited transactions |
| Money market | Share certificate or money market share account | Money market account or CD | Higher interest rate, money locked away for a set time or higher minimum balance |
Other types of share accounts at credit unions
Beyond the basic share account, credit unions offer variations with different names. A share certificate is a credit union's version of a certificate of deposit (CD). You agree to leave money in the account for a set period — typically three months to five years — and in return you get a higher interest rate. If you withdraw before the term ends, you pay a penalty.
Some credit unions also offer money market share accounts, which sit between a regular share account and a share certificate. They require a higher minimum balance, pay higher interest, and may limit how many withdrawals you can make per month. The structure is similar to a bank's money market account, just with credit union terminology.
Individual credit unions may use slightly different names for these products. One credit union might call a short-term savings product a "share savings account" while another calls it a "regular share account." The names vary, but the function is consistent: you are depositing money you own as a member, and the credit union is paying you interest on it.
Opening a share account at a credit union
To open a share account, you first need to 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 a certain organization, or have a family member who is already a member. Once you meet the membership requirement, you can open a share account.
The process is straightforward. You provide identification, proof of address, and your Social Security number. You make the initial share purchase (usually $5 to $25) and deposit your first contribution to the share account. Many credit unions let you do this online, by mail, or in person at a branch. Some have no minimum balance requirement for a share account, while others require you to keep a small amount on deposit at all times.
After you open the account, you can deposit and withdraw money the same way you would at a bank — through direct deposit, transfers, ATM withdrawals, or in-person at a branch. The credit union sends you statements showing your balance and interest earned, just as a bank does.
Frequently Asked Questions
Is a share account safer than a bank savings account?
No — both are equally safe up to $250,000. Credit union share accounts are insured by the NCUA, and bank savings accounts are insured by the FDIC. The insurance coverage and protection are identical. Your money is protected either way.
Do I earn interest on the share I purchase when I join?
No. The initial share purchase (usually $5 to $25) is your membership fee and ownership stake. Interest is earned only on the money you deposit into your share account after that. The share itself does not earn interest.
Can I withdraw money from my share account anytime?
Yes, with the same limits that explore to bank savings accounts. Federal rules allow six withdrawals per month from a savings or share account. After that, the credit union may charge a fee or move the account to a different type. If you need unlimited withdrawals, you would open a share draft account instead.
What happens to my share if I close my account?
When you close your share account, the credit union refunds your initial share purchase. If you are leaving the credit union entirely, they return that money to you. If you keep other accounts open at the credit union, your membership continues and your share remains active.
Do all credit unions use the term "share account"?
Most do, but some smaller or newer credit unions may use "savings account" to match what members expect from banks. The underlying structure is the same — you own a share of the credit union. The terminology may vary slightly by institution, but the concept is consistent across the credit union system.