topic Re: Negative interest rates.. in Community Chat

Negative interest rates..

esmeraldagooch — Sat, 31 Oct 2015 13:32:23 GMT

What would you do if your bank decided to charge you to deposit and hold your savings? Apparently it's been discussed three times here in the USA in the last three weeks.

Others are already dealing with it.

http://www.bloombergview.com/quicktake/negative-interest-rates

Re: Negative interest rates..

151949 — Sat, 31 Oct 2015 14:01:57 GMT

The small amount of money we keep in our passbook savings acct. is not there to earn interest. The money we want to grow for us we invest with our broker. The money we keep in our savings is "working savings" - it is mostly our income tax return and we keep it in the bank til it is needed to pay for things like insurance, property taxes and our yearly campground fees, and our trip home to Pa. The interest is so low it is , essentially, almost nothing, but that is OK - we don't have it there to earn interest. It's just resting there so when we need it to pay something it is at our disposal. So, I guess it is there for our convenience. In the meanwhile I do get that the bank makes money with my money, good for them!

Re: Negative interest rates..

millieshops — Sat, 31 Oct 2015 14:05:27 GMT

The only thing I know for certain is that if there were a charge, the first step I'd take would be consolidation. Right now I have accounts in more than one bank- for a variety of reasons - but if banks add another cost, they'd force me to concolidate -probably something it's time to do anyway.

Will it happen? No opinion really although I assume it's small accounts that cost them money. That's why I'm thinking consolidation.

Re: Negative interest rates..

terrier3 — Sat, 31 Oct 2015 14:07:00 GMT

@esmeraldagooch wrote:
What would you do if your bank decided to charge you to deposit and hold your savings? Apparently it's been discussed three times here in the USA in the last three weeks.
Others are already dealing with it.
http://www.bloombergview.com/quicktake/negative-interest-rates

The laughable part of this story is the interest rates charged on credit cards - have they gone down??? I don't think so.

So the bank gets the money at less than one percent interest rate - and lends it out in morgages or CCs for 4%-38%...making HUGE profits just shuffling money around.

Re: Negative interest rates..

terrier3 — Sat, 31 Oct 2015 14:08:22 GMT

@151949 wrote:
The small amount of money we keep in our passbook savings acct. is not there to earn interest. The money we want to grow for us we invest with our broker. The money we keep in our savings is "working savings" - it is mostly our income tax return and we keep it in the bank til it is needed to pay for things like insurance, property taxes and our yearly campground fees, and our trip home to Pa. The interest is so low it is , essentially, almost nothing, but that is OK - we don't have it there to earn interest. It's just resting there so when we need it to pay something it is at our disposal. So, I guess it is there for our convenience. In the meanwhile I do get that the bank makes money with my money, good for them!

I have investments too...but as my investments grow (or even if they don't) the fees charged by the brokerage house really add up...they make a ton of money, no matter how the market does.

Re: Negative interest rates..

handygal2 — Sat, 31 Oct 2015 14:20:03 GMT

@terrier3 wrote:
@151949 wrote:
The small amount of money we keep in our passbook savings acct. is not there to earn interest. The money we want to grow for us we invest with our broker. The money we keep in our savings is "working savings" - it is mostly our income tax return and we keep it in the bank til it is needed to pay for things like insurance, property taxes and our yearly campground fees, and our trip home to Pa. The interest is so low it is , essentially, almost nothing, but that is OK - we don't have it there to earn interest. It's just resting there so when we need it to pay something it is at our disposal. So, I guess it is there for our convenience. In the meanwhile I do get that the bank makes money with my money, good for them!
I have investments too...but as my investments grow (or even if they don't) the fees charged by the brokerage house really add up...they make a ton of money, no matter how the market does.

I agree. Banks and brokerage houses are "cleaning up" at the expense of the saver/investor. The government doesn't seem to care.

Re: Negative interest rates..

151949 — Sat, 31 Oct 2015 14:52:07 GMT

We don't do a lot of buying/selling /trading in the market as the vast majority of our savings are safer in municiple bonds. Since our broker only charges us when he does a trade - we don't spend a lot on those fees. Our broker used to be my cousin but then she got cancer and passed away, before she quit working , as we were very close to retiring, she recommended the man we are with now as he does only retirees accounts. We are happy with him. Our money makes enough so we can have a monthly income from it and not have to touch the original deposit so we consider ourselves fortunate. After all - your broker does deserve to make a living helping you manage your money.

Re: Negative interest rates..

millieshops — Sat, 31 Oct 2015 15:18:33 GMT

@terrier3It's not the low single digit overlay that really bothers me, but 36%? Isn't that above any usury rate or are their states without a usury rate? My state's top is 24% and even that should be lowered for all except the very riskiest, very largest loans.

I'm not optimistic about seeing a real change though - money is powerful stuff, so whether we look at the Egyptian kings of old, the English royalty and on to the billionaires and millionaires running or wanting to run our country, they never want to give up even a small part of their wealth.

We're really the first middle class society that has existed and some days I also expect we're the last.

Re: Negative interest rates..

Maudelynn — Sat, 31 Oct 2015 15:39:37 GMT

The article states this is a tactic being considered by the european central bank (similar to our Federal Reserve). The economy is bad enough in Europe that charging negative rates to banks (not customers) is thought to be an encouragement for banks to stop hoarding money and lend out their excess cash. When banks hold onto money, they impede the economy. Lending to small businesses and individuals helps the economy recover.

ETA: Where and why was this discussed here in the US?

Re: Negative interest rates..

Wayne-QVC — Sat, 31 Oct 2015 15:43:03 GMT

This post has been removed by QVC because it's political.

Re: Negative interest rates..

Puzzle Piece — Sat, 31 Oct 2015 15:54:22 GMT

Do you ever wonder where these people pull these ideas out of?

It's not enough that folks work and work at hard and stressful jobs, get jack taxed on their earnings, have to make ends meet with rising costs of everything, and fees attached to everything.

I have to think that the banks/credit companys have to deal with losses of sort due to identity theft. Unfortunately, we all pay.

Re: Negative interest rates..

terrier3 — Sat, 31 Oct 2015 16:18:26 GMT

@millieshops wrote:
@terrier3It's not the low single digit overlay that really bothers me, but 36%? Isn't that above any usury rate or are their states without a usury rate? My state's top is 24% and even that should be lowered for all except the very riskiest, very largest loans.

I'm not optimistic about seeing a real change though - money is powerful stuff, so whether we look at the Egyptian kings of old, the English royalty and on to the billionaires and millionaires running or wanting to run our country, they never want to give up even a small part of their wealth.

We're really the first middle class society that has existed and some days I also expect we're the last.

The 2009 CARD act set penalty fees but not interest rates. The average rate for people who have missed payments is over 29%, but some banks charge more.

And state rules don't really apply since banks operate in many states and have ways of getting around state rules.

Sad, but true!

Re: Negative interest rates..

June222 — Sat, 31 Oct 2015 16:45:20 GMT

The day the banks are going to charge me to keep my savings in their bank....is the day I withdraw my savings and hide it in a safe place buried in my back yard for free.

Re: Negative interest rates..

sgraham30 — Sat, 31 Oct 2015 17:24:49 GMT

I don't know about their savings accounts since most of my funds are with my broker but my bank charges a $6.95 monthly fee for my checking account. However, as long as I have at least one direct deposit every month (I do) & use my debit card a specified number of times, the fee is waived.

Re: Negative interest rates..

handygal2 — Sat, 31 Oct 2015 17:13:04 GMT

Banks are "laughing all the way to the bank" (pardon the pun), at our expense-- literally.

Re: Negative interest rates..

Mama Mia — Sat, 31 Oct 2015 17:46:04 GMT

n/m

Re: Negative interest rates..

Maudelynn — Sat, 31 Oct 2015 17:30:21 GMT

Again- this is not happening in the US. The European Central Bank has considered charging negative rates to european BANKS, not customers. It's a tactic to get banks in Europe to lend, to help the economy.

p.s. Hope the OP comes back to let us know where and why this is being "talked about" in the US.

Re: Negative interest rates..

esmeraldagooch — Sat, 31 Oct 2015 17:46:10 GMT

@Maudelynn wrote:
The article states this is a tactic being considered by the european central bank (similar to our Federal Reserve). The economy is bad enough in Europe that charging negative rates to banks (not customers) is thought to be an encouragement for banks to stop hoarding money and lend out their excess cash. When banks hold onto money, they impede the economy. Lending to small businesses and individuals helps the economy recover.

ETA: Where and why was this discussed here in the US?

The Federal reserve:

A Fed official hinted at NIRP at their Sept 2015 meeting

Oct 9th Fed president BillDudley stating they were an option though not a relevent conversation right now.This statement was followed up by Minneapolis Fed President NarayanaKocherlakota stating point blank that the Fed should “consider negative rates.

Re: Negative interest rates..

Maudelynn — Sat, 31 Oct 2015 20:44:51 GMT

@esmeraldagooch wrote:
@Maudelynn wrote:
The article states this is a tactic being considered by the european central bank (similar to our Federal Reserve). The economy is bad enough in Europe that charging negative rates to banks (not customers) is thought to be an encouragement for banks to stop hoarding money and lend out their excess cash. When banks hold onto money, they impede the economy. Lending to small businesses and individuals helps the economy recover.

ETA: Where and why was this discussed here in the US?
The Federal reserve:
A Fed official hinted at NIRP at their Sept 2015 meeting
Oct 9th Fed president BillDudley stating they were an option though not a relevent conversation right now.This statement was followed up by Minneapolis Fed President NarayanaKocherlakota stating point blank that the Fed should “consider negative rates.

"though not a relevent conversation right now" are the key words. Thanks so much for posting this.

Re: Negative interest rates..

Stray — Sun, 01 Nov 2015 03:12:55 GMT

@Maudelynn wrote:
@esmeraldagooch wrote:
@Maudelynn wrote:
The article states this is a tactic being considered by the european central bank (similar to our Federal Reserve). The economy is bad enough in Europe that charging negative rates to banks (not customers) is thought to be an encouragement for banks to stop hoarding money and lend out their excess cash. When banks hold onto money, they impede the economy. Lending to small businesses and individuals helps the economy recover.

ETA: Where and why was this discussed here in the US?
The Federal reserve:
A Fed official hinted at NIRP at their Sept 2015 meeting
Oct 9th Fed president BillDudley stating they were an option though not a relevent conversation right now.This statement was followed up by Minneapolis Fed President NarayanaKocherlakota stating point blank that the Fed should “consider negative rates.
"though not a relevent conversation right now" are the key words. Thanks so much for posting this.

I imagine some posters might have savings in European countries?