Guide To Share Accounts - Description, Pros, and Cons

Share Accounts are savings accounts offerd by Credit Unions. A Credit Union is owned and controlled by its members and is a not-for-profit institution, which is quite unlike a bank, whose sole purpose is to make a profit for the shareholders. If you're don't belong to a Credit Union, and you're like to find one you're eligible to join, contact the Credit Union league for your state. Eligibility requirements are nowadays very wide ranging, based on a whole variety of criteria such as who you work for, or where you live.

Share Accounts are a very safe home for your money. Your savings are insured by the National Credit Union Share Insurance Fund (NCUSIF). As yet no member of a federally insured credit union has ever lost any savings.

As a rule, you must deposit and hold a minimum sum in your share account (typically as low as $20). You can then withdraw savings whenever you wish so long as the minimum sum remains in your account.

Features of most Share Accounts include:

No checking. Cash is available on demand from an ATM or from a branch by submission of a passbook.

Interest is paid, normally in the form of a dividend

Unlimited access to funds. There is no restriction on how much can be withdrawn, although some branches might request advance notice for large withdrawals.

No overdraft is allowed.