What are other checkable deposits?


Other checkable deposits counts deposit accounts at banks that are either Negotiable Order of Withdrawal (NOW) accounts or part of a Automatic Transfer Service (ATS) with a bank.

A NOW account is a deposit account that allows limited checking and pays interest to the depositor. NOW accounts were introduced to get around the historic ban on paying interest to demand deposits since the great depression. In 2011 the prohibition was lifted demand deposit holders to be paid in interest by banks.

An ATS allows checking accounts (demand deposit accounts) to be coupled with savings accounts so that same day transfers can be made.

From FRED: The other checkable deposits component of M1 consists of negotiable order of withdrawal (NOW) accounts and automated transfer service (ATS) balances at banks, thrifts, and foreign related institutions, credit union share draft balances, and demand deposits at thrifts.

Written on August 11, 2016