What Is a Regular Share Account at a Credit Union?

A regular share account at a credit union serves as a foundational savings vehicle, establishing membership and functioning as a basic savings account for deposits and withdrawals. This account is fundamental to the cooperative structure of credit unions.

The Core Concept of a Regular Share Account

Its existence is directly tied to the concept of membership, making it distinct from typical savings accounts found at traditional banks. Depositing funds into this account signifies that an individual becomes a member-owner of the credit union. This ownership structure is a defining characteristic of credit unions, which operate as financial cooperatives.

Credit unions are not-for-profit entities, meaning they exist to serve their members rather than generate profits for external shareholders. This structure allows credit unions to return earnings to members through various benefits, such as competitive rates on savings products and loans.

Key Features and Functions

Regular share accounts typically feature the earning of dividends, which are similar to interest but represent a portion of the credit union’s earnings distributed back to members. These dividends are usually compounded and paid monthly or quarterly. It is important to note that dividends received from a credit union are generally considered taxable income, similar to interest earned from other financial institutions.

Minimum balance requirements for these accounts are often low, commonly ranging from $5 to $25. Some credit unions might even require as little as $1 to establish this foundational account. Maintaining this minimum balance is typically a condition for retaining membership and accessing other credit union services. Funds held in regular share accounts are generally liquid, allowing for convenient deposits and withdrawals. Like other federally insured financial accounts, regular share accounts at credit unions are typically insured up to $250,000 per member by the National Credit Union Administration (NCUA).

Establishing and Managing Your Account

Opening a regular share account typically involves a straightforward process. Individuals usually need to provide identification, such as a Social Security number or Individual Taxpayer Identification Number, along with a valid government-issued photo ID like a driver’s license or passport. Proof of address, such as a utility bill, may also be required. An initial deposit, often a small amount, is necessary to establish the account and formally become a member.

Once established, members can manage their regular share account through various convenient channels. Online banking platforms and mobile applications provide 24/7 access to account information, allowing members to check balances and view transaction history. Deposits can be made through methods such as direct deposit of paychecks, electronic transfers from other financial institutions, or by depositing cash or checks in person at a branch or via an ATM. Withdrawals are similarly accessible through ATMs, online transfers, or in-person at credit union branches.