Answer:
by Randy Carey:
Reserving a seven day right of withdrawal.
204.2(b)(3) Demand deposit does not include:
(i) Any account that is a time deposit or a savings deposit under this part;
(ii) Any deposit or account on which the depository institution has reserved the right to require at least seven days' written notice prior to withdrawal or transfer of any funds in the account and either--
A) Is subject to check, draft, negotiable order of withdrawal, share draft, or similar item, such as an account authorized by 12 U.S.C. 1832(a) (NOW account) and a savings deposit described in Sec. 204.2(d)(2), provided that the depositor is eligible to hold a NOW account; or
(B) From which the depositor is authorized to make transfers by preauthorized transfer or telephonic (including data transmission) agreement, order or instruction to another account or to a third party, provided that the depositor is eligible to hold a NOW account;
Answer:
by John Burnett:
There are two criteria for a NOW account --
1. The bank must have reserved the right to require 7 days' notice of withdrawals from the account AND
2. The owner of the account must be an individual (includes a sole proprietor) or individuals, a non-profit organization, domestic government or government unit or other person identified in section 204.130 of Federal Reserve Board Regulation D.
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