Legal Definitions - share-draft account

A share-draft account is a type of account that a member maintains at a credit union. It works like a checking account at a bank, and the member can use share drafts to pay third parties. The account is also known as a share account.

Example: John is a member of a credit union and has a share-draft account. He uses his share drafts to pay his rent, utilities, and other bills. The credit union deducts the amount from his account and pays the bills on his behalf.

This example illustrates how a share-draft account works. The member can use share drafts to pay bills, and the credit union deducts the amount from the account.