Starling introduce negative interest rates on their Euro account

Uxb1

Switzerland banks have been doing it for a while - to their high net worth customers
https://www.swissinfo.ch/eng/bank-savers-feel-sting-from-negative-interest-rates/45424320
In reality neg rates for customers are just variable bank fees by the back door

Ballard

Uxb1 said:h

Switzerland banks have been doing it for a while - to their high net worth customers
https://www.swissinfo.ch/eng/bank-savers-feel-sting-from-negative-interest-rates/45424320
In reality neg rates for customers are just variable bank fees by the back door

They aren’t fees at all. They are interest rates. Banks get charged for holding EUR and so they charge the same to the customer. It’s exactly the same process as when interest rates are positive. The difference is that customers seem to be being charged roughly the same interest rate as the banks so there’s no margin in it for them. 

Curls2208

Surely with negative interest rates, you'd just keep all your money in a Safe or something instead xD

Uxb1

Well indeed that is why
1 There is a push to move for the economy to become totally cash free. As I said many moons ago on here when discussing cash use in the UK that negative interest rates for the masses are not possible without going cashless because as you said it would just generate the mother of all bank runs as everyone would take out their money.

2. Hence at the moment anyway negative rates to date have only been applied to those with large sums of money in the bank where withdrawing to cash is not really a practical proposition.  Those who can will simply split their money between banks to avoid being over the negative rates lower limit.  However the multi-multi millionaires who will have the odd million knocking around in bank accounts here and there....will find this more difficult!

Ballard

£10,000, for example, would accrue interest of £50 over a year and this could indeed be avoided by withdrawing cash and putting it in a safe at home. You would have to ask yourself how much a safe would cost and what the additional insurance premiums would work out at.

newlease

Sensationalist title and comments for karma. It is for balances over €50,000 which will be a tiny fraction. 

colsten

newlease said:

Sensationalist title and comments for karma. It is for balances over €50,000 which will be a tiny fraction. 

It's not sensationalist but factual.