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Economic Commentary

The Battle for NOWs

Competition among depository institutions has intensified since January 1, 1981, when commercial banks, savings and loan associations, and mutual savings banks were authorized to offer negotiable order of withdrawal (NOW) accounts nationwide. Depository institutions can now compete for interest-bearing transaction accounts of households and nonprofit orqanizations. The banking industry as a whole conceivably will lose some of its share of the third-party payments (or transaction account) market. Through aggressive marketing efforts and pricing schemes, banks can lessen the competitive impact of NOW accounts; indeed, some banks even may gain an additional share of the transaction account market.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Watro, Paul R. 1981. “The Battle for NOWs.” Federal Reserve Bank of Cleveland, Economic Commentary 8/10/1981.