Also known as: negotiable order of withdrawal · negotiable order of withdrawals · NOW · NOW account
Written by attorneys · grounded in primary & secondary sources — see below
A negotiable instrument drawn on a credit union or thrift institution that serves as a check for withdrawing funds from an account.
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Nimbus Cloud maintains an account at a credit union and issues a negotiable order of withdrawal to settle a vendor invoice. The instrument meets the requirements for a check, allowing the payee to obtain payment directly from the credit union. The transaction proceeds without issue under current rules treating such orders as checks.
Nora Nash draws a negotiable order of withdrawal on her savings and loan account to pay Nordic Ventures for services rendered. When a question arises about the timing of the transaction, the order functions identically to a bank check and resolves the payment obligation.
They were historically issued by credit unions and thrift institutions before those entities gained full checking powers. Under current rules they qualify as checks because the definition of bank now includes such institutions.
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They continue in use but are treated simply as checks under modern commercial law. The special name is largely historical once the institutions obtained equivalent powers.
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