A primary share account is not a savings account — it's a membership requirement at a credit union
A primary share account is the basic membership account you must open to join a credit union. It functions like a checking account in some ways and a savings account in others, but it is neither. Think of it as the door you walk through to become a member. Once you have one, you can then open a separate savings account if you want to.
The confusion happens because primary share accounts earn a small amount of interest, just like savings accounts do. But they are designed for regular deposits and withdrawals — the same way you would use a checking account. The interest rate is usually very low, often less than 0.5% per year, so people don't typically use them as their main savings tool.
Credit unions require a primary share account because it establishes your membership. You own a small piece of the credit union itself once you open one. That ownership stake is what makes a credit union different from a bank — it's a cooperative owned by its members, not by shareholders trying to make a profit.
Key Takeaways
- A primary share account is a membership account required to join a credit union, not a type of savings account.
- You can use a primary share account like a checking account for regular deposits and withdrawals, even though it earns interest.
- Most credit unions require you to keep a minimum balance in your primary share account, often between $5 and $25.
- Once you have a primary share account, you can open a separate savings account at the same credit union if you want a dedicated place to save.
How a primary share account works in practice
When you open a primary share account, the credit union typically requires you to deposit a small amount of money — often $5 to $25, depending on the credit union. This becomes your initial share. You now own a membership stake in that credit union.
You can deposit and withdraw money from your primary share account whenever you need to, just like a checking account. Some credit unions give you a debit card for the account. Others require you to visit a branch or use their online banking system. The rules vary by credit union, so ask what access methods they offer.
The account earns interest, but the rate is set by the credit union and is usually very small. It might be 0.01% to 0.5% per year. You will not get rich from the interest, but it is better than keeping cash under your mattress. The interest is calculated and added to your account monthly or quarterly, depending on the credit union's policy.
The difference between a primary share account and a savings account
A savings account at a credit union is a separate account you open after you already have a primary share account. It is designed specifically for money you want to set aside and not touch regularly. Savings accounts often have higher interest rates than primary share accounts — sometimes 3% to 5% or more, depending on the credit union and current market conditions.
The main practical difference is how you use them. Your primary share account is your membership account and your everyday account. Your savings account is where you keep money you are trying to grow. Some credit unions limit how many times per month you can withdraw from a savings account, while primary share accounts usually have no withdrawal limits.
You do not have to open a savings account if you do not want to. Many people use their primary share account as their only account at the credit union. But if you want to earn more interest on money you are not spending, a savings account is the better choice.
Minimum balance requirements and fees
Most credit unions require you to keep a minimum balance in your primary share account at all times. This is usually $5 to $25, though some credit unions ask for more. If your balance drops below the minimum, the credit union may charge you a monthly fee or close the account.
The minimum balance requirement exists because your primary share account represents your ownership stake in the credit union. The credit union wants to make sure you are genuinely committed to membership. The good news is that the minimum is usually very small — much smaller than the minimum balance requirements at many banks.
Check with your specific credit union about their minimum balance rule and what happens if you fall below it. Some credit unions waive the fee if you set up direct deposit or keep a certain balance in another account at the same credit union.
When you might want both accounts
If you are saving money for a specific goal — a down payment on a car, an emergency fund, or a vacation — a separate savings account makes sense. You can move money from your primary share account to your savings account and let it sit there earning interest. This keeps your everyday spending money separate from your savings goal.
Some people also use a primary share account like a checking account and a savings account like a traditional savings account, without ever opening a checking account at the credit union. This works well if you do not need the extra features that come with a dedicated checking account, such as check-writing or bill pay.
The choice depends on how you manage money. If you spend from your account regularly and also want to save, two accounts help you keep the two purposes separate. If you rarely spend and mostly save, you might be fine with just the primary share account.
How to open a primary share account
To open a primary share account, you will need to visit a credit union branch or explore online, depending on whether the credit union accepts online membership. You will need to bring a government-issued photo ID and proof of your address, such as a recent utility bill or lease agreement.
The credit union will ask you to fill out a membership process. This is different from a bank account process — it is asking you to become a member of the cooperative, not just open an account. The process will ask for your name, address, Social Security number, and employment information.
Once your process is approved, you will make your initial deposit to fund your primary share account. The credit union will give you information about how to access your account — whether through a debit card, online banking, or in-person at the branch. You are now a member and can use the account when ready.
Frequently Asked Questions
Can I use my primary share account like a checking account?
Yes, you can deposit and withdraw money regularly from a primary share account. Many credit unions issue debit cards for primary share accounts. However, some credit unions do not offer check-writing or bill pay from a primary share account, so ask what features yours includes before you open it.
Do I have to keep money in my primary share account forever?
You must keep at least the minimum balance to stay a member, but you can withdraw money above that minimum whenever you need it. If you want to close your membership entirely, you can withdraw all your money and close the account, though some credit unions ask you to keep it open as long as you use other services there.
What happens to my primary share account if I move to a different state?
You can usually keep your primary share account open even if you move, especially if the credit union is part of a shared branching network or has online banking. Some credit unions have branches in multiple states. Contact your credit union to ask about your options before you move.
Can I earn more interest by putting all my money in a savings account instead of a primary share account?
You still need to keep a primary share account to be a member, but yes, a savings account will earn more interest. Move money above your minimum balance into a savings account to earn the higher rate. You will earn interest on both accounts, but the savings account rate will be better for money you are not spending.
What if my credit union does not offer savings accounts?
Not all credit unions offer savings accounts as a separate product. Some use the primary share account as the only savings option. If you want a dedicated high-interest savings account, ask your credit union what products they offer, or consider joining a different credit union that has the accounts you need.