A share-draft account is a bank account held by a person at a credit union, functioning similarly to a checking account. The account holder can utilise share drafts to make payments. The term “share-draft account” is used because the individual is not only a member of the credit union but also possesses a share in it.
A share-draft account, also known as a share account, is a type of account that members maintain at a credit union. Similar to a checking account at a bank, this account allows members to use share drafts to make payments to third parties. For instance, John, a credit union member, utilises his share drafts to pay his rent, utilities, and other bills. The credit union deducts the necessary amount from his account and handles the bill payments on his behalf. This example effectively demonstrates the functionality of a share-draft account, where members can conveniently pay bills using share drafts, with the credit union deducting the corresponding amount from their account.
A share-draft account is a type of checking account offered by credit unions, which allows members to access their funds through checks, debit cards, and electronic transfers.
Share-draft accounts are offered by credit unions, while regular checking accounts are typically offered by banks. Share-draft accounts may also have different fee structures and account requirements.
Some benefits of a share-draft account include lower fees, higher interest rates, and a focus on member service and satisfaction.
Many credit unions offer online banking services for share-draft accounts, allowing members to check balances, transfer funds, and pay bills.
Yes, share-draft accounts are insured by the National Credit Union Administration (NCUA) up to $250,000, similar to the FDIC insurance for bank accounts.
Fees for share-draft accounts can vary by credit union, but may include monthly maintenance fees, overdraft fees, and ATM fees.
Yes, share-draft accounts allow members to write checks to pay for goods and services, as well as to transfer funds to other accounts.
There may be limits on the number of withdrawals or transfers from a share-draft account per month, in accordance with federal regulations.
Many credit unions offer overdraft protection services, allowing members to link their share-draft account to a savings account or line of credit to cover overdrafts.
To open a share-draft account, you will need to become a member of a credit union and meet their membership requirements, such as living or working in a certain area or belonging to a specific organisation.
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This glossary post was last updated: 17th April 2024.
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