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#2239485 - 07/13/20 07:16 PM NOW Account
parr04 Offline
Gold Star
Joined: Aug 2004
Posts: 391
oklahoma
Can a single member Limited Partnership have a NOW Account?

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Operations Compliance
#2239487 - 07/13/20 07:31 PM Re: NOW Account parr04
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
Nothing has changed regarding who may and may not maintain a NOW account.
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#2239491 - 07/13/20 07:56 PM Re: NOW Account parr04
RockChucker, CAMS Offline
Diamond Poster
Joined: Jul 2013
Posts: 1,691
The Country
What has changed since NOW accounts became a thing is commercial accounts are now allowed to be paid interest without the NOW restrictions so many banks have eliminated NOW accounts.
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#2239492 - 07/13/20 08:02 PM Re: NOW Account parr04
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,643
No, a single member Limited Partnership is an entity organized or operated to make a profit, and, therefore, cannot have a NOW account.

From 204.130:
"(1) Any individual may maintain a NOW account regardless of the purposes that the funds will serve. Thus, deposits of an individual used in his or her business including a sole proprietor or an individual doing business under a trade name is eligible to maintain a NOW account in the individual's name or in the ``DBA'' name. However, other entities organized or operated to make a profit such as corporations, partnerships, associations, business trusts, or other organizations may not maintain NOW accounts."
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All statements are my opinion, not those of my employer, and should not be taken as legal advice.
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#2239493 - 07/13/20 08:05 PM Re: NOW Account RockChucker, CAMS
parr04 Offline
Gold Star
Joined: Aug 2004
Posts: 391
oklahoma
Thanks. Just needing some backup before I tell management this account has to be changed.

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#2239494 - 07/13/20 08:08 PM Re: NOW Account parr04
Skittles Online
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Skittles
Joined: Sep 2002
Posts: 13,964
TN
Are you positive your accounts are NOW accounts and not interest bearing checking accounts?

Here we do have NOW accounts. Don't know why it wasn't changed a few years ago, but it wasn't.
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#2239507 - 07/13/20 09:15 PM Re: NOW Account parr04
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,858
Cape Cod
Banks have been slow to move away from NOW accounts because change, however slight, creates work. I don't mean that to be cynical; it's just a fact, and when banks operate on very slim interest margins, make-work projects tend to get low priorities.

Businesses have not pushed for interest on DDA because interest rates are so low and have been low for over ten years.

But it's also true that continuing to offer NOW accounts instead of moving them to interest-bearing DDAs does create compliance risk, however minimal, and some amount of work for compliance staff when they have to chase down branch new accounts staff to get them to "fix" that occasional illegal NOW account that gets opened. And it creates work for folks in banks that haven't been around in the industry since before Dodd-Frank and need to ask questions about NOW accounts, and for those of us who have to answer those questions.

I'm not worried that elimination of NOW accounts would mean we wouldn't get any more questions to answer.
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