A NOW account is a checking account, but with restrictions that most people don't use anymore
A NOW account (Negotiable Order of Withdrawal) is technically a checking account because it lets you write checks and make withdrawals. The difference is that NOW accounts are savings accounts with check-writing privileges attached, rather than pure checking accounts. Banks are allowed to require you to give notice before you withdraw money from a NOW account—usually seven days—though most don't enforce this in practice.
The real reason NOW accounts matter today is that they're rare. Most banks stopped offering them in the 1990s and 2000s because regular checking accounts became cheaper to run and easier to market. If you have a NOW account, it's usually because you've had it for decades and your bank hasn't closed it. If you're opening a new account, you're almost certainly getting a standard checking account instead.
Key Takeaways
- NOW accounts are savings accounts with check-writing ability, not true checking accounts, though they function similarly for everyday use.
- Banks can legally require seven days' notice before you withdraw from a NOW account, but most don't enforce this rule anymore.
- NOW accounts are nearly extinct—most banks phased them out decades ago in favor of standard checking accounts.
- If you're opening a new account today, you'll get a checking account, not a NOW account, regardless of what you ask for.
Why NOW accounts existed and what made them different
NOW accounts were created in the 1970s as a workaround to federal law. At that time, banks were not allowed to pay interest on checking accounts. A NOW account was technically a savings account, so it could pay interest, but it also came with check-writing privileges. This made it attractive to people who wanted both interest and the ability to write checks.
The catch was the notice requirement. Because a NOW account was legally a savings account, the bank could require you to wait seven days before withdrawing money. In theory, this protected the bank's cash flow. In practice, banks almost never enforced it, and the rule became mostly symbolic.
When federal law changed in the 1980s to allow interest-bearing checking accounts, NOW accounts lost their main advantage. Banks began phasing them out because a regular checking account was simpler to manage and market. By the early 2000s, most major banks had stopped offering them entirely.
How a NOW account works if you still have one
If your bank still offers NOW accounts or you inherited one from an older account, the mechanics are straightforward. You deposit money, write checks against it, use a debit card, and set up direct deposits and automatic payments just like a regular checking account. The account may pay a small amount of interest, though rates are typically very low.
The seven-day notice rule is still technically in the account agreement, but you won't encounter it in normal use. Banks don't enforce it because doing so would create customer service nightmares and drive people to competitors. If you ever tried to withdraw a large sum in cash and the bank invoked the rule, that would be unusual enough to warrant a conversation with a manager.
Why you probably don't have a NOW account
Unless you opened your account before 1995 or inherited one from someone who did, you almost certainly have a standard checking account, not a NOW account. Banks stopped offering NOW accounts because they were confusing to customers and offered no real advantage once interest-bearing checking became legal.
If you're unsure what type of account you have, your bank statement or online banking portal will say "checking account" or "NOW account" clearly. You can also call your bank's customer service line and ask. The name matters mainly for historical and legal reasons—functionally, a NOW account works like a checking account for everything you actually do with it.
Should you switch from a NOW account to a checking account
If you have a NOW account and your bank still offers it, there's no urgent reason to switch. The account works, and closing it might trigger fees or complications. However, if your bank is phasing out NOW accounts or if you're looking to move your money anyway, switching to a standard checking account makes sense.
The main reason to switch is access to better features. Modern checking accounts often come with no monthly fees, higher interest rates on linked savings accounts, better mobile apps, and easier integration with budgeting tools. A NOW account from 1985 probably doesn't offer any of these. When you do switch, your bank can usually transfer your direct deposits and automatic payments to the new account for you.
The difference between a NOW account and other account types
| Account Type | Check Writing | Interest Paid | Withdrawal Notice Required | Common Today |
|---|---|---|---|---|
| NOW Account | Yes | Usually yes, very low | Seven days (rarely enforced) | Rare |
| Checking Account | Yes | Rarely | No | Very common |
| Savings Account | No | Yes | Varies by bank | Very common |
| Money Market Account | Limited (usually 3-6 checks per month) | Yes, higher than savings | Varies by bank | Common |
Frequently Asked Questions
Can I still open a NOW account at my bank?
Most banks no longer offer NOW accounts to new customers. If you ask, they'll direct you to a standard checking account instead. A few credit unions or smaller regional banks may still offer them, but you'd need to call and ask directly. For practical purposes, assume your only option is a checking account.
Does a NOW account affect my credit score?
No. Checking accounts and NOW accounts don't show up on your credit report and don't affect your credit score. Banks may check your banking history through ChexSystems (a banking background check system), but opening or closing either type of account won't change your credit.
What happens if my bank closes my NOW account?
Your bank can close any account with notice, usually 30 days. They'll tell you how to access your remaining balance—typically by check, transfer to another account, or withdrawal. If you have automatic payments or direct deposits set up, you'll need to move those to a new account before the closure date.
Is the interest on a NOW account worth keeping one?
Almost never. NOW account interest rates are typically 0.01% to 0.05% annually, which means you'd earn less than a dollar per year on a $1,000 balance. A high-yield savings account at an online bank pays 4% to 5% on the same balance. If you want interest, a separate savings account is a much better choice.
Can I write unlimited checks on a NOW account?
Yes, most NOW accounts allow unlimited check writing, just like a regular checking account. However, the seven-day notice rule technically applies to all withdrawals, including checks. In practice, this is never enforced, and your checks will clear normally.