Difference Between a Now Account & an Interest Checking Account

NOW accounts are similar to interest checking accounts.

A NOW account and an interest-earning checking account are very similar to each other. NOW stands for negotiable order of withdrawal and NOW accounts are offered at many banks, mutual savings banks and savings and loan companies.

NOW Account

NOW accounts are offered at many financial institutions. They are accounts which bear interest to the account holder. They are said to be like a savings account in a sense; however checks can be written against the money in the account.

Interest Checking Account

Interest-earning checking accounts are hard to find. Most checking accounts do not pay interest on deposited money; however, some banks still offer checking accounts that do pay interest.

NOW Account Interest and Fees

NOW account holders earn a low rate of interest on their deposits. Typically NOW accounts do not require a minimum balance at all times; however, most NOW accounts do charge a monthly service fee.

Interest Checking Interest and Fees

Interest earning checking accounts typically have a lot of restrictions on them. The main restriction is that these accounts require a minimum balance at all times. If the amount drops below the requirement, a fee is charged. These accounts almost always charge a monthly service charge and pay a low rate of interest on deposits.

References

• Investopedia: Negotiable Order of Withdrawal Account
• Kiplinger: Interest-Earning Checking Accounts
• All Business: Business Definition for NOW Account
• California State Treasurer: Negotiable Order of Withdrawal