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]
While a "negotiable order of withdrawal" is essentially identical to a check, US banking regulations define the terms separately and state that an account on which one can draw a "check" cannot pay interest. NOW accounts are structured to comply with Regulation Q, which until July 2011 prohibited interest on traditional 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]
[edit] See also
- Money market account
- Canadian Payments Association has no such support for this account type.
[edit] References
- ^ 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.
- ^ [1], BUSINESS PEOPLE; Haselton Brothers' Role In Banking Innovations, NY Times Article
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