A savings account at a credit union is called a share savings account

The account you open to save money at a credit union is called a share savings account or sometimes just a share account. The word "share" comes from the fact that when you deposit money into a credit union, you are buying shares of the credit union itself — you become a partial owner. A traditional bank calls the same thing a savings account, but credit unions use different terminology because of how they are structured as member-owned cooperatives rather than for-profit institutions.

The account works the same way a bank savings account does: you deposit money, it earns interest, and you can withdraw it when you need it. The difference is in the name and in how the credit union operates. Because credit unions are not-for-profit and owned by their members, any profits they make get returned to members through better interest rates, lower fees, or other benefits.

Key Takeaways

  • A share savings account is the credit union term for what a bank calls a savings account, and the name reflects that you own a share of the credit union.
  • Share savings accounts earn interest on your balance and allow you to withdraw money, just like a traditional bank savings account.
  • Credit unions may also offer share money market accounts and share certificates (CDs), which are higher-yield alternatives to a basic share savings account.
  • Your deposits in a share savings account are insured up to $250,000 by the National Credit Union Administration (NCUA), the same way the FDIC insures bank deposits.

How a share savings account differs from a checking account at a credit union

Credit unions also call a checking account a share draft account. The key difference is that a share draft account comes with a debit card and check-writing privileges, while a share savings account is meant for storing money rather than spending it. You can transfer money between the two, but a share savings account typically has limits on how many withdrawals you can make per month — usually six — whereas a share draft account has no withdrawal limit.

Interest rates on share savings accounts are usually higher than on share draft accounts, which is why credit unions encourage you to keep money you are not spending regularly in the savings account. If you need to access your money frequently, a share draft account makes more sense, even if the interest rate is lower.

Other savings products credit unions offer

Beyond a basic share savings account, most credit unions offer a share money market account, which typically pays a higher interest rate in exchange for requiring a larger minimum balance — often $2,500 to $25,000, depending on the credit union. The tradeoff is the same as at a bank: higher yield, but you have to keep more money in the account.

Credit unions also offer share certificates, which are the credit union version of a certificate of deposit (CD). You agree to leave your money in the account for a set period — three months, one year, five years — and in return you get a may provide interest rate that is usually higher than what a share savings account pays. If you withdraw the money before the term ends, you pay a penalty.

NCUA insurance on share savings accounts

Money you deposit in a share savings account is insured by the National Credit Union Administration (NCUA), a federal agency that works the same way the FDIC does for banks. Your deposits are covered up to $250,000 per account category at each credit union. This means if the credit union fails, you will not lose your money up to that limit.

The $250,000 limit applies to each account category separately. So if you have a share savings account and a share certificate at the same credit union, each is insured up to $250,000. If you have multiple share savings accounts at the same credit union, they are added together and the total is insured up to $250,000. If you want to insure more than $250,000 at one credit union, you can open accounts in different names — for example, one in your name alone and one in joint ownership with a spouse — and each would be insured separately.

Interest rates and fees on share savings accounts

Interest rates on share savings accounts vary by credit union and change over time. Some credit unions offer rates that are higher than what most banks pay, especially if you maintain a minimum balance. Others offer very low rates. You can compare rates by checking the credit union's website or calling them directly.

Fees also vary. Many credit unions charge no monthly maintenance fee on a share savings account, particularly if you keep a minimum balance or set up direct deposit. Some charge a small fee — typically $3 to $5 per month — if your balance falls below a certain threshold. Read the fee schedule before you open an account so you know what to expect.

How to open a share savings account

To open a share savings account, you will need to become a member of the credit union first. 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 live in a particular county. Once you confirm you are may be able to access to join, you can apply in person, online, or by phone.

When you apply, you will need to provide identification, proof of address, and your Social Security number. The credit union will run a background check and verify your information. If you are approved, you can fund your share savings account with an initial deposit, usually a minimum of $5 to $25 depending on the credit union. Some credit unions waive the minimum if you set up direct deposit.

Moving money in and out of a share savings account

You can deposit money into a share savings account by transferring it from another account, setting up direct deposit from your paycheck, or depositing cash or checks in person at a credit union branch. You can withdraw money by transferring it to another account, requesting a check, or withdrawing cash at a branch. Some credit unions also allow ATM withdrawals, though not all ATMs accept credit union cards.

Remember that federal rules limit you to six withdrawals or transfers per month from a share savings account. If you exceed that limit, the credit union may charge a fee or convert the account to a share draft account. This rule exists to distinguish savings accounts from checking accounts. If you need to move money more frequently, use a share draft account instead.

Frequently Asked Questions

Is a share savings account the same as a savings account at a bank?

It works the same way, but the name is different because credit unions are member-owned cooperatives. Both are insured up to $250,000 by their respective federal agencies — the NCUA for credit unions and the FDIC for banks — and both earn interest on your balance.

Can I use a debit card to withdraw money from a share savings account?

Most credit unions do not issue debit cards for share savings accounts. Debit cards are typically linked to share draft accounts (checking). You can transfer money from your share savings account to your share draft account and then use the debit card, or you can withdraw cash at a branch or ATM.

What happens if I withdraw more than six times from my share savings account in a month?

Federal rules limit withdrawals and transfers to six per month. If you exceed this limit, the credit union may charge a fee per excess transaction, usually $5 to $10. Some credit unions will close the account or convert it to a share draft account if you repeatedly exceed the limit.

Do all credit unions offer the same interest rate on share savings accounts?

No. Interest rates vary widely by credit union and change frequently. Some credit unions offer competitive rates, while others offer very low rates. Check your specific credit union's website or call them to find out what rate they are currently paying.

Can I have a share savings account and a share draft account at the same credit union?

Yes. Most members have both. The share draft account is for everyday spending, and the share savings account is for money you want to keep separate and earn interest on. You can transfer money between them as needed.