So I’m young and not dumb but not very smart either. I just joined a credit union. What’s the difference between my two accounts, one called shares and the other called draft? All the results online are a bit difficult for me to understand and don’t really answer any of my main questions:
Which one is considered checking and is the other savings? Which will my debit card pull from? Which will my direct deposit go to that’s supposed to be the checking account?
Thank you
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You should verify with your credit union but, usually, you need a particular account to be a member of the credit union, which is basically a savings account. That’s probably your “shares account”. Then almost everyone needs an account for everyday use, like a chequing account, that’s your “draft account”. Probably…again, verify with your credit union.
Assuming that’s right, your debit card will pull from the draft/chequing account will go into whatever account you tell your employer to put it…could be either. It doesn’t really matter unless you have a limit on how many transactions you’re allowed on your shares/savings account each month.
Good practice would be to direct deposit to your savings, then transfer whatever you’ve budgeted for your spending into your draft/chequing account for day to day use.
This question has specificity that will be influenced to some degree by the actual account details, limitations, features, etc.
Generally:
shares/savings have limited withdrawals (3ish per month/cycle usually, yet this needs to be confirmed with institution).
Checking/draft has an unlimited number of transactions, and is meant to be a transactional account. (Again, double check with your Institution for specifics).
Your debit card will generally pull from checking; however, it can also pull from savings depending on how you have it set up.
Additionally, you may have overdraft set up for your checking to draw from your savings. This could have associated fees (talk to your institution for specifics).
Your debit card could also have a “credit card” logo, allowing it to be used at places that accept transaction from that company (usually VISA or Mastercard in the US). This is NOT a line of credit, but uses your actual moneys in your account.
There are many other nuances, which all depend upon how your accounts are set up, regulations, policies, and many other factors. The best thing you can do is write down all your questions, and ask someone who works there, as well as locate the specifics in the disclosures, which indicate specifically how everything functions.
While you stated that it may be difficult for you, you should have a very good understanding of how your accounts set up, as well as what rules are followed to prevent fees that were avoidable.
Usually, you can find someone that will be more than willing to explain all of this, as well as adjust your account to fit your desires/needs. If you cannot find one of those people where you do your banking, consider finding a new institution where you can have a good working relationship with the employees.
Again, you ask questions that can be tied to exactly how you set up your account(s), so you must speak to an appropriate institutional representative to answer your questions, otherwise you risk having undesirable outcomes, which could include fees, as well as other consequences. Please educate yourself, as ultimately, you will be responsible for your own accounts and any advice here is potential totally wrong. Only an appropriate institutional representative can answer your questions.
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