A checking account at a credit union is usually called a share draft account

The name comes from the way credit unions are structured. When you open an account, you become a member-owner of the credit union, not just a customer. The money you deposit is called a share because you literally own a share of the institution. A share draft is the credit union's term for a check — it's a draft (or withdrawal) against your share of the credit union's funds.

Some credit unions use the term "checking account" anyway, especially if they're trying to make things simpler for people switching from a bank. But if you see "share draft account" on a credit union's website or in their paperwork, that's the same thing: a place to deposit money, write checks, use a debit card, and pay bills.

The function is identical to a bank checking account. You get a debit card, online banking, the ability to set up automatic payments, and usually a checkbook. The only real difference is the name — and sometimes the fees, which tend to be lower at credit unions than at banks.

Key Takeaways

  • Credit unions call checking accounts "share draft accounts" because members own shares in the credit union rather than being customers of a bank.
  • A share draft is straightforward the credit union's word for a check or withdrawal from your account.
  • Some credit unions use "checking account" anyway to avoid confusion, so you may see either term depending on which credit union you join.
  • Share draft accounts work exactly like bank checking accounts — you get a debit card, checks, online banking, and the ability to pay bills.

Why the name is different

Banks and credit unions are organized differently at their core. A bank is a business owned by shareholders who may never use the bank. A credit union is owned by its members — the people who have accounts there. When you put money into a credit union, you're not lending it to a business; you're buying a share of the credit union itself.

That ownership structure is why the terminology is different. Your account balance represents your ownership stake. When you write a check, you're drafting against your share. It's not just a naming convention — it reflects how credit unions actually work legally and financially.

Over time, credit unions have started using "checking account" more often in their marketing and customer materials, especially online. This shift happened because most people are familiar with that term from banks, and credit unions want to make switching easier. But the official term in credit union documents and regulations remains "share draft account."

What you can do with a share draft account

A share draft account gives you all the same tools as a bank checking account. You can write checks, use a debit card for purchases and ATM withdrawals, set up direct deposit, and arrange automatic bill payments. Most credit unions offer online banking so you can check your balance, transfer money, and deposit checks by phone camera.

Many credit unions also offer overdraft protection, which links your share draft account to a savings account or a small line of credit. If you overdraw your checking account, the credit union automatically transfers money from savings or lets you borrow a small amount to cover it, rather than bouncing the check and charging you a fee.

Interest rates on share draft accounts vary by credit union. Some pay a small amount of interest on your balance, while others pay nothing. Ask about this when you're choosing a credit union — it's one of the few ways checking accounts can actually earn you money, even if the rate is small.

Share draft accounts versus savings accounts at credit unions

Credit unions use specific names for different account types. A share draft account is for frequent transactions — the account you use like a checking account. A share savings account is for money you're setting aside and not touching often. The word "share" appears in both names because both represent ownership in the credit union.

The main practical difference is how often you can withdraw money. Share draft accounts are designed for unlimited transactions. Share savings accounts may have limits on how many withdrawals you can make per month, though many credit unions have removed these limits in recent years. Interest rates are usually higher on savings accounts than on share draft accounts, which makes sense — the credit union can lend out money that's sitting in savings longer.

Some credit unions also offer money market accounts, which are a hybrid: they pay higher interest than checking but let you write a limited number of checks per month. These are less common than they used to be, but they're worth asking about if you want your money to earn something while staying accessible.

Fees and minimums

Credit unions generally charge lower fees on share draft accounts than banks do on checking accounts. Many credit unions offer free checking with no minimum balance requirement. Some charge a small monthly fee (often $5 to $10) but waive it if you maintain a minimum balance or set up direct deposit.

Overdraft fees at credit unions tend to be lower than at banks — sometimes $25 to $35 per overdraft instead of $35 to $40. Some credit unions don't charge overdraft fees at all if you link overdraft protection to a savings account. Ask about this specifically when you open your account, because it can save you money if you ever accidentally overdraw.

ATM fees vary. If your credit union is part of a shared branching network or ATM network, you may be able to use thousands of ATMs nationwide for free. If not, you might pay $2 to $3 per out-of-network ATM withdrawal. This is worth checking before you join, especially if you travel or live somewhere without many credit union branches nearby.

How to open a share draft account

To open a share draft 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's already a member.

Once you confirm you're may be able to access for membership, you'll fill out a membership process (usually online or in person). You'll need a government-issued ID and proof of address, like a utility bill or lease. The credit union will run a background check and verify your identity. This usually takes a few minutes to a few hours.

After you're approved as a member, you'll open your share draft account. You'll choose a PIN for your debit card, set up online banking, and decide whether you want checks printed. Most credit unions let you start using your debit card and online banking when ready, even while you're waiting for physical checks to arrive in the mail.

Frequently Asked Questions

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

Yes, functionally they are the same. A share draft account is what credit unions call a checking account. The name reflects credit union ownership structure, but you use it exactly like a bank checking account — writing checks, using a debit card, and paying bills.

Can I get checks for my share draft account?

Yes. When you open your share draft account, you can order checks. Most credit unions print them for free or charge a small one-time fee. You can also request them online, and they usually arrive within one to two weeks.

Do share draft accounts earn interest?

Some do, but the rate is usually very low — often less than 0.01 percent. It depends on the credit union. If earning interest on your checking balance matters to you, ask about this when you're choosing which credit union to join.

What happens if I overdraw my share draft account?

That depends on your credit union's overdraft policy. Some charge a fee per overdraft. Others offer overdraft protection, which automatically transfers money from your savings account or a line of credit to cover the shortage. Ask about this before you open your account.

Can I use my share draft debit card everywhere a bank debit card works?

Yes. Credit union debit cards work on the same networks as bank debit cards (Visa, Mastercard, or Interlink), so you can use them anywhere those cards are accepted — online, in stores, and at ATMs.