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.

The Canadian and Mexican banking systems have no such equivalents to the NOW account, it is purely a US legal and regulatory construction.

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
• Canadian Payments Association has no such support for this account type.

References

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