Share Draft

DEFINITION of 'Share Draft'

A type of draft used in credit unions as a way to access funds in individual accounts. Share draft accounts at credit unions are the equivalent of personal checking accounts at banks. Likewise, share drafts are the equivalent of bank checks. Shares represent partial ownership in a credit union, and credit union members (shareholders) write drafts (checks) as a way to access the value of their partial ownership (shares).

BREAKING DOWN 'Share Draft'

A credit union functions differently than a conventional bank; in a credit union, every member is also a partial owner. Because credit unions are cooperatively owned, members do not make deposits, but rather purchase shares. Shares do not earn interest, but instead earn dividends. What's more, share draft accounts usually carry neither monthly fees nor minimum balance requirements, unlike many bank checking accounts.

RELATED TERMS
  1. Bank Draft

    A type of check where the payment is guaranteed to be available ...
  2. Credit Union

    Member-owned financial co-operative. These institutions are created ...
  3. National Association Of Federal ...

    An industry trade group founded in 1967 that represents federal ...
  4. Payable Through Draft

    A draft that is payable through a specific bank. Payable-through-draft ...
  5. National Credit Union Administration ...

    An agency of the United States federal government that was created ...
  6. Credit Union National Association ...

    This is the premier national trade association representing credit ...
Related Articles
  1. Personal Finance

    6 Benefits Of Using A Credit Union

    Find out how credit unions are community-focused and offer better interest rates than traditional banks.
  2. Markets

    Unions: Do They Help Or Hurt Workers?

    Learn the pros and cons of these organizations and how they fit into today's economy.
  3. Personal Finance

    What Are Home-Based Credit Unions?

    They’re a far cry from a traditional bank, but that doesn’t mean you shouldn’t park your money there or get a loan – if one meets your needs.
  4. Markets

    Check Your Checking-Account History

    Something you never thought you’d have to worry about: whether a bank will grant you a checking account. If you’ve had too many overdrafts, it might not.
  5. Personal Finance

    The History Of Unions In The United States

    Although the overall power of labor unions may not be what it once was, they still maintain a great deal of influence in the United States.
  6. Investing

    The Best Small Business Checking Accounts in 2016

    Accounts with big banks offer frills, such as mobile and text-based banking – but for small businesses, local banks and credit unions can save money.
  7. Markets

    Western Union Stock Trades Ex-Dividend Tuesday (WU)

    Western Union will send its dividend payment on June 30 to shareholders of record as of June 16.
  8. Retirement

    The Best Way To Borrow

    There are many avenues from which to drum up funding. Find out the pros and cons of each.
  9. Investing

    Customer Information File - CIF

    A customer information file is a collection of data about a bank or credit union patron.
  10. Investing

    The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.
RELATED FAQS
  1. How can I cancel a bank draft that I have purchased?

    Learn about what a bank draft is and how it works, the circumstances under which a bank draft may be cancelled, and what ... Read Answer >>
  2. Does the FDIC cover credit unions?

    Learn whether or not the FDIC insures your funds at a credit union, and what types of insurance are available at the different ... Read Answer >>
  3. What are the requirements for opening a savings account in the United States?

    Understand what information and documentation is necessary to open a savings account within the United States, and learn ... Read Answer >>
  4. Can a checking account affect your credit score?

    Find out if having a checking account can have a negative impact on your credit report. Generally, it doesn't, but there ... Read Answer >>
  5. Do businesses in states with right-to-work laws have demonstrably less deadweight ...

    Learn more about the economic impact of right-to-work laws and how unions impact production and purchase levels. Explore ... Read Answer >>
  6. How does your checking account affect your credit score?

    Learn how your checking account is related to your credit score, as well as what types of banking activities do and do not ... Read Answer >>
Hot Definitions
  1. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  2. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  3. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  4. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  5. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
  6. Security

    A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship ...
Trading Center