Topic: Negotiable Order of Withdrawal Accounts
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Can a for-profit organization open a NOW account?
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We do not believe a for-profit organization may open a NOW account. However, we believe that you may allow the for-profit organization to open an ordinary interest-bearing account and you should note that the Dodd-Frank Act repealed the prohibition of paying interest on demand deposit accounts. See 76 Fed. Reg. 41392 (July 14, 2011). The Federal…
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With all the changes from Dodd-Frank, are corporations and LLCs still prohibited from having NOW accounts?
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We do not believe that an LLC can open a “NOW account,” but under changes made by the Dodd-Frank Act, you can allow any type of business (LLCs/limited liability companies, partnerships, and corporations) to open ordinary deposit accounts that earn interest. While there may be no major differences between NOW accounts and checking accounts, one…
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Can an LLC open a NOW account?
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We do not believe that an LLC can open a “NOW account,” but you may allow the business to open an ordinary interest-bearing account. The Federal Deposit Insurance Act authorizes NOW accounts (accounts which allow for withdrawals and on which you pay interest) only when “the entire beneficial interest is held by one or more…