Negotiable Order of Withdrawal account

In the United States, a Negotiable Order of Withdrawal account (NOW account) is a deposit account that pays interest, on which checks may be written.[1]

They are structured to comply with Regulation Q, which prohibits interest on checking accounts: NOW accounts are interest-bearing, and checks may be written on them, but legally they are not interest-bearing checking accounts.

[edit] History

NOW accounts are considered checkable deposits, and are counted in the Fed's M1 definition of the money supply. As such, they are considered liabilities from the bank's perspective.[1]

The NOW account was developed and put into effect by Ronald Haselton, former President and CEO of the Consumer Savings Bank in Worcester, MA. [2]

See also

* Money market deposit account

References

1. ^ a b Mishkin, Frederic S. (2007). The Economics of Money, Banking, and Financial Markets (Alternate Edition). Boston: Addison Wesley. p. 220. ISBN 0-321-42177-9.
2. ^ [1], BUSINESS PEOPLE; Haselton Brothers' Role In Banking Innovations, NY Times Article