Super-NOW Bank Accounts

Super Negotiable Order of Withdrawal Accounts

Scarcely had the federal government authorized banks to offer money market savings accounts than it also granted them permission to introduce checking accounts that pay money market interest rates — accounts known as “Super-NOW’s.”

Depending on the policy of the individual bank, Super-NOW accounts may offer all of the features of regular NOW accounts, including free check-writing privileges and no service fees as long as a minimum balance is maintained. If you are to earn money market rates, you must maintain the legal minimum of $2,500 in your Super-NOW account. If you are to benefit from free check-writing privileges, the bank will generally require you to maintain the same balance as is required for a regular NOW account.

The interest paid on Super-NOW accounts usually varies from day to day, but in general is a point or so below that paid on money market savings accounts. Should a Super-NOW account fall below the $2,500 minimum, most banks will continue to pay interest, though it will be reduced to the rate paid on regular NOW accounts.

While a Super-NOW pays slightly lower interest, its major advantage over a money market savings account is that it offers unlimited checking privileges. One banker has gone so far as to say that with these new high-yield accounts there is no reason for anyone with $2,500 ever to maintain a passbook or an ordinary checking account. Indeed, it is quite possible that the minimum deposit for Super-NOW’s, as well as money market savings accounts, will be reduced in the near future.