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Advantages
- NOW accounts have the same features as a regular
checking account.
- Interest is paid on your checking account balance.
- Some may have free checking or provide a minimum
number of free checks per month, free travelers checks, and no annual
fee credit cards.
Disadvantages
- There may be a high minimum balance.
- Interest is low (about the same rate as for
savings accounts).
- Some may charge a deposit fee and/or per-check
fee.
- Fees are usually higher than for a regular checking
account.
Because many NOW accounts charge higher fees, you
may not be ahead in using this kind of account. Depending upon the fee structure
and the way your daily balance changes, you might be better off working
with a bank that will transfer funds from a savings account to your checking
account when needed. A share draft account is a credit union version of
a NOW account and usually carries lower fees than banks and savings and
loans.
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