Final answer:
NOW accounts are tailored for individuals with limited access to banking services and typically provide debit card access without overdraft fees, combining features of savings and checking accounts. The banking industry's evolution has blurred the lines between these account types, with some checking accounts earning interest and some savings accounts allowing limited check writing.
Step-by-step explanation:
The question pertains to NOW accounts (Negotiable Order of Withdrawal accounts), which are a type of bank account that combines the features of savings and checking accounts. These accounts are structured to cater to the needs of the unbanked or underbanked, individuals who either do not have access to traditional bank services or who utilize limited banking services. NOW accounts typically include the ability to use a debit card for transactions, similar to a checking account, but they may not offer the ability to write paper checks. These accounts also could offer an interest rate on the deposits akin to that of savings accounts. To support the financial management of account holders who might face issues with overdrafts, these NOW accounts are often designed without overdraft fees to provide a secure and accessible banking option.
It's important to note that the banking industry has seen a blurring of the lines between checking and savings accounts over recent decades. Checking accounts may bear interest like savings accounts if certain balance requirements are met, and savings accounts might allow the owner to write a certain number of checks each month. Nevertheless, the distinction between the accounts usually involves the presence of checks and the interest-bearing nature of the accounts.