Negotiable-Order-of-Withdrawal Account

Negotiable-Order-of-Withdrawal Account

An account with a bank, savings & loan, or mutual-savings association that pays interest and on which checks may be written. NOW accounts are structured to pay interest while also complying with Regulation Q, which states that checking accounts may not pay interest. The main difference with checking accounts is the restriction on ownership: only individuals and some non-profit and government organizations may have NOW accounts.

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Negotiable-order-of-withdrawal account. A negotiable-order-of-withdrawal (NOW) account is an interest-bearing checking account that pays interest on the balance, usually at a rate comparable to a money market account.

You may be required to maintain a fairly substantial minimum balance in a NOW account to avoid high fees or loss of interest, or both.