What kind of accounts did the Garn-St. Germain Act promote more use of, relative to banking practices?

The Garn-St. Germain Act, enacted in 1982, played a significant role in promoting the use of Negotiable Order of Withdrawal (NOW) accounts. These accounts allowed depositors to write checks against their savings deposits while still earning interest, thus bridging the gap between checking and savings accounts. This innovation was critical in modernizing the banking system, as it provided consumers with more flexibility and encouraged higher savings.

The act aimed to deregulate the savings and loan industry, which included enabling financial institutions to offer these types of accounts. Prior to this, traditional savings accounts typically did not permit check-writing, leading consumers to keep funds in less interest-bearing checking accounts. By allowing more access to funds while still accumulating interest, NOW accounts appealed to consumers looking for ways to maximize their savings while maintaining liquidity.

This legislative change reflected a broader shift in banking practices toward more consumer-friendly options that still provided a return on deposits. The other options do not align with the specific initiatives promoted by the Garn-St. Germain Act, which primarily focused on introducing and popularizing the NOW account.