Banking Practice Exam

Negotiable Orders of Withdrawal (NOW) accounts are indeed commonly referred to as checking accounts. This is because they provide the same basic functionality as traditional checking accounts, allowing customers to deposit and withdraw money while also offering interest on the balances maintained within the account. NOW accounts were created to combine features of savings and checking accounts, allowing for negotiable withdrawal orders that function similarly to checks. While time deposit accounts, money market accounts, and loan accounts serve different purposes, they do not share the same fundamental characteristics as checking accounts. Time deposit accounts typically impose stricter withdrawal conditions, money market accounts often have higher minimum balance requirements and limited transactions, and loan accounts are designed strictly for borrowing purposes, not for regular deposits and withdrawals. Thus, the essence of NOW accounts aligns most closely with checking accounts.