NOW-ACCOUNT STRATEGIES OF DEPOSITORY INSTITUTIONS - A RECENT SURVEY OF GOALS, PRICING POLICIES, COSTS, AND RETURNS IN NEW-ENGLAND
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Comprehensive findings of a survey of negotiable order of withdrawal (NOW) accounts in New England-area banks and thrift institutions are presented. Depository institutions' responses to questions concerning problem areas, account development, cross selling, planning, customer profiles, pricing, costs and returns, and goals are covered. Because the NOW account represents the demand deposit of the future, knowledge of it is of fundamental importance for understanding recent developments in the financial sector of the United States. Recent deregulation has liberalized interest-rate ceilings on some deposit accounts; nonetheless, regulators have instituted tiered-pricing systems with NOW-type accounts at the core. Because such tiering will likely be independently implemented with continued deregulation, banks and thrifts need to become better informed about NOW-account services and their potential contributions to profitability. The results of the survey suggest that many institutions are taking a defensive posture toward NOWs, which is incongruous with recent trends toward greater competition and innovation in the financial-services industry. 1986.
