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Simple English definitions for legal terms
share draft
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A quick definition of share draft:
A share draft is like a check that a member of a credit union can use to take money out of their account and give it to someone else. It's a written order that tells the credit union to pay a certain amount of money to a third party. It's similar to a bank draft, which is a type of check that one financial institution writes to another. There are different types of drafts, like a time draft that has a specific payment date, or a sight draft that can be paid on demand. Draft can also mean the compulsory enlistment of people into military service.A more thorough explanation:
A share draft is a type of check that a member of a credit union can use to withdraw funds from their share account and pay a third party. It is similar to a check that is written to draw funds out of a checking account at a bank.
For example, if a credit union member wants to pay their rent, they can write a share draft for the amount due and give it to their landlord. The landlord can then deposit the share draft into their own bank account to receive the payment.
Share drafts are a convenient way for credit union members to access their funds and make payments without having to withdraw cash or use a debit card. They are also a secure form of payment because they require the member's signature and can only be used if there are sufficient funds in the share account.