Negative Interest Rates

[Apc2604]

Silly question, but do you have to pay the bank for any savings you may have?

https://www.bbc.co.uk/news/business-55934405

[bednobs]

https://www.theanswerbank.co.uk/Business-and-Finance/Question1723888.html
anything here help?

[Hopkirk]

I think where it has happened it is more to do with big business with large amounts of cash, often for short periods.
They find themselves having to pay to have it banked.

[Apc2604]

Thanks Bednobs. We have a financial adviser and our main savings are doing well, but over lockdown we don't spend anything and our outgoings in retirement and lockdown are minimal. Our financial adviser advises Premium Bonds as being the best bet for money that is in a bank savings account.

[Sunk]

I wouldn’t think so, that is not the aim of negative interest rates (NIRs).

Just has Sunak has borrowed to the hilt to pay for this crisis, he wants struggling businesses and consumers to use NIRs to more borrow money and spend it.
Seems a desperate ploy, but these are desperate times.

[Apc2604]

Interesting Sunk.

[bobbinwales]

Not a silly question at all. In theory it could happen- its no diffrent to a small admin/service fee some accounts charge (wealth management fee) but its unlikely that for most savers it'll be less than zero because some would just stash wads of cash under the mattress which aint going to help are economy. More likeley intrest rates will be zero on most accounts. Thats a concern for those who live off intrest but the idea is to encourage them to draw down and live off some of there savings and spending it to help the economy. Its not a problem really if inflation RPI is allso close to 0 which it is now but would be if inflation leap's up.
Mortgages woudnt go negative though as theyd be paying you to borrow outragous amounts and that could lead to huge problems if rates suddenly went back up.

[bobbinwales]

this is useful- Martin Lewis clip on it Apc
https://www.express.co.uk/finance/personalfinance/1393360/negative-interest-rates-uk-savings-mortgage-bank-of-England

[Peter Pedant]

No there are no accounts where the interest rates is neg in the UK

[Apc2604]

Thanks Bob. We were saving some money in the bank to pay for a new roof and it's mounted up sooner could now have two new roofs. As we are shielding we didn't want builders around. I think more premium bonds might be the best bet. You can cash them quite easily. We are amazed at how our other savings are performing now!

[Peter Pedant]

if you have a financial adviser who you pay
you certainly SHOULDNT be second guessing on AB
BUT - - - - there is plenty of yadda to fill in a cold evening

about twenty y ago - they went neg in Japan and Korea.

the real interest rate may be neg - thatis the interest rate minus the inflation rate.

santander favours it ( favvuuurz eet: the CEO is svelte spanish girl and she gets more moolah, innit?)

it is thought unlikely that people will draw out their money and put it under the bed.

[Peter Pedant]

then you should be giving us advice and not asking

[ToraToraTora]

yes that's what it means, if savings rates are negative they'll deduct money from your account. happened in japan many times. In reality western banks will probably not go below 0.

[THECORBYLOON]

It was discussed on Radio Four this afternoon. The expert said it was more for the large savers who would have to pay to save. He said someone with £500 could just withdraw it all in cash but he didn't give a savings level that would be affected.