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Will interest rates go negative?
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"Will interest rates go negative?
What are the consequences?
In theory, you will have to pay your bank money to keep your savings in their bank.
Not sure it will happen though "
Tend to agree, would only need a couple of hundred people to want to withdraw large amounts and a panic would start..
They would lose far more in the shares collapse.. |
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It's already happening. There are plenty of bank accounts that charge a monthly fee, but now have such miniscule interest rate that you would need hundreds of thousands in there to earn back the fee. |
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It won't be proper negative interest rates of course. A real negative rate would imply the bank paying you when you take a loan out. Instead it means a wholesale move to fee charging accounts, where you have to pay the bank for the use of their facilities. Your salary goes in? That's a 1% charge thank you. You use your card at the supermarket? That's a 1% charge thank you. You want to use your arranged overdraft? That's a £100 to set up the arrangement, an instant 10% charge for every £1 you borrow, plus another 10% for every month until you can pay it off (in fact pretty well identical to the credit card trap that many low paid already get stuck in). You want to move your money to a different bank? That's a 5% fee.
You want to opt out of the bank and use cash? You can't, you can only get paid by money going into a bank account (with a 1% handling charge...). |
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By *ye-spy OP Man
over a year ago
London |
"It's already happening. There are plenty of bank accounts that charge a monthly fee, but now have such miniscule interest rate that you would need hundreds of thousands in there to earn back the fee."
Your correct some credit cards new have a monthly fee.
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"It's already happening. There are plenty of bank accounts that charge a monthly fee, but now have such miniscule interest rate that you would need hundreds of thousands in there to earn back the fee.
Your correct some credit cards new have a monthly fee.
"
and many others are still offering interest free transfers. |
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"It's already happening. There are plenty of bank accounts that charge a monthly fee, but now have such miniscule interest rate that you would need hundreds of thousands in there to earn back the fee.
Your correct some credit cards new have a monthly fee.
and many others are still offering interest free transfers."
There are though some cards do charge a fee but will give you money back on how much you spend.
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By (user no longer on site)
over a year ago
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A friend of mine who works at an executive level for one of the big banks says that this will happen. The move away from cash use has made it feasible to charge for personal banking so expect to see monthly or annual fees coming in in the next year or two. Free personal banking is going to disappear. Dont forget that most businesses do not get free banking so its not an enormous change for a lot of people. |
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"A friend of mine who works at an executive level for one of the big banks says that this will happen. The move away from cash use has made it feasible to charge for personal banking so expect to see monthly or annual fees coming in in the next year or two. Free personal banking is going to disappear. Dont forget that most businesses do not get free banking so its not an enormous change for a lot of people. "
Then everyone would do well to move to Nationwide then. |
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By *abioMan
over a year ago
Newcastle and Gateshead |
In theory it has happened in the past... Japan famously had a negative interest rate for years! So it meant to encourage banks to lead to businesses rather than holding onto it!
It doesn’t work at a consumer level as it doesn’t encourage people to save |
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"In theory it has happened in the past... Japan famously had a negative interest rate for years! So it meant to encourage banks to lead to businesses rather than holding onto it!
It doesn’t work at a consumer level as it doesn’t encourage people to save "
True though there is no real incentive to save for the last year or so returns are pitiful. |
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By *ye-spy OP Man
over a year ago
London |
Negative interest rates mean pensioners for being forced into risky investments to get returns.
The pension funds are passive investors and they will soon be 50% of the stock market in lots of countries.
Modern monetary theory might also be tried but not sure how they are going to implement it. |
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"In theory it has happened in the past... Japan famously had a negative interest rate for years! So it meant to encourage banks to lead to businesses rather than holding onto it!
It doesn’t work at a consumer level as it doesn’t encourage people to save
True though there is no real incentive to save for the last year or so returns are pitiful. "
I dont think the government banks want anyone to save at the moment. They need people to spend as much as possible. |
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