Also known as: negotiable orders of withdrawal · NOW account · NOW accounts · NOW · negotiable withdrawal order
Written by attorneys · grounded in primary & secondary sources — see below
A negotiable instrument payable on demand and issued against funds deposited with a financial institution.
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Nathaniel Newman maintains an account at Norton Bank and issues a negotiable order of withdrawal to pay a supplier. The instrument directs the bank to release funds on demand from the deposited balance. Norton Bank honors the order without advance notice because the instrument functions as a demand item.
Noah Nakamura draws a negotiable order of withdrawal on his savings account at Nexus Technologies credit union to transfer funds to a vendor. The credit union treats the order as payable on demand from existing deposits. The transaction proceeds without requiring prior notice of withdrawal.
A negotiable order of withdrawal is drawn against funds on deposit at a financial institution and functions as a demand instrument. It allows the holder to obtain payment without advance notice in most modern banking contexts.