Negotiable Order of Withdrawal (NOW) Account

Q: What is the difference between a NOW account and a savings account?

A NOW account is a transactions account that allows unlimited withdrawals and unlimited transfers. A savings account, meanwhile, may restrict the amount of transfers or withdrawals you can make during a statement cycle.

Q: Can I withdraw money from a NOW account anytime?

Yes, you can generally withdraw money from a NOW account at any time using checks, debit cards, or electronic transfers. While banks have the legal right to require advance notice, this is rarely enforced, so NOW accounts function much like regular checking accounts with the added benefit of earning interest.

Q: What is the average interest rate for a NOW account?

The average interest rate for a NOW account is unclear. The FDIC keeps track of the average interest rate of common deposit account products, including savings accounts, interest checking accounts, money market accounts, and CDs. The FDIC, however, does not specifically keep track of the average interest rate of NOW accounts.

Negotiable Order of Withdrawal (NOW) Account

Sulaiman Abdur-RahmanUpdated April 16, 2025

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

A negotiable order of withdrawal (NOW) account is a type of interest-bearing checking account offered by banks and credit unions. It allows account holders to earn interest on their deposits while still enjoying the convenience of writing checks and making withdrawals. NOW account holders are permitted to make unlimited transactions on the account, including unlimited transfers and unlimited withdrawals. A NOW account typically gives you the ability to write checks drawn from the account and the ability to make transactions with an ATM card or debit card. Below we highlight how a NOW account works.

What Is a NOW Account?

A NOW account — aka negotiable order of withdrawal account — is a banking account similar to a checking account. As mentioned above, a NOW account typically gives you the ability to write checks drawn from the account and the ability to make transactions with an ATM card or debit card.One of the differences between a checking account and NOW account is that businesses are generally prohibited from opening a NOW account. Another major difference is that depository institutions with NOW accounts must reserve the right to require at least seven days of written notice from depositors who wish to withdraw or transfer funds from their NOW account. (This rule is rarely enforced, though.)

NOW Account Interest Rates

Deposits in a NOW account may earn compound interest. Community banks may offer competitive NOW account interest rates, but NOW account interest rates may change after the account is opened.With any variable-rate account, the annual percentage yield (APY) may go up or down. Financial institutions may change variable APYs at their discretion.

Pros of a NOW Account

Here are some of the pros of a NOW account:

Account holders may earn interest on their deposits.
Depositors can make unlimited transactions on the account.
Account holders may have the ability to write checks drawn from the account.

Cons of a NOW Account

Here are some of the cons of a NOW account:

Federal rules and regulations generally prohibit businesses from opening these accounts.
Banks reserve the right to require a seven-day written notice from depositors who wish to withdraw or transfer funds from the NOW account.
APYs may not be as competitive as high-yield savings accounts.

Recommended: Guide to Opening a Savings Account

How to Open a NOW Account

Here are the basic steps to open a NOW account:

Find a bank that offers NOW accounts.
Present proof of identity and proof of residence.
Submit an application to open a NOW account.
Meet any minimum deposit threshold to open the account.

You may have the option to open a NOW account and other deposit accounts at the same bank or different banks. How many bank accounts should you have? You may open as many bank accounts as you need to meet your goals.Here are other banking accounts you may consider outside of NOW accounts:

Interest-bearing checking accounts
High-yield savings accounts
Money market accounts
No-penalty certificates of deposit (CDs)

The Takeaway

A NOW account is a bank deposit account comparable to a checking account. It may be right for you if you’re looking for an everyday transactions account from a community bank.If you’re looking to earn interest on your savings, Lantern by SoFi can help. Our online banking marketplace allows you to compare APYs and choose an FDIC-insured bank account that’s right for you.Compare today’s high-yield savings rates including fees and balance minimums.

Frequently Asked Questions

What is the difference between a NOW account and a savings account?

Can I withdraw money from a NOW account anytime?

What is the average interest rate for a NOW account?

Photo credit: iStock/AndreyPopov

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About the Author

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.

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