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The RBS banking group has warned 1.3 million customers they could be charged negative interest rates if the Bank of England cuts base rates below zero.
The group, which includes NatWest, wrote to its business and commercial account holders about the potential changes, which mean they could lose money even when they are in credit.
The letter said: "Global interest rates remain at very low levels and in some markets are currently negative.
"Dependent on future market conditions, this could result in us charging on credit balances."
The Bank of England's base rate currently stands at the historically low rate of 0.5%, where it has been for more than seven years - and some economists believe it should be cut further to stimulate the economy.
Source: Sky News
From October 1st, the Dutch bank [ABN Amro] is adjusting its conditions to state that the bank can give negative interest rates to account holders with a business checking or -savings account, ANP reports.
Source: NL Times
(Score: 2) by Dunbal on Wednesday July 27 2016, @08:04PM
I wonder what they hope their business model will be. When people close their bank accounts and move to another bank, the debit/credit cards go with them. Plus when their cash reserves contract, their lending power contracts five-fold or more, whatever model they're currently using. Maybe the government will give them free money again and that's what they're hoping for? Or maybe people are so stupid they will pay to keep money in a bank account. Might as well pay for a safe-deposit box instead. It might be cheaper.
(Score: 0) by Anonymous Coward on Wednesday July 27 2016, @08:31PM
Might as well pay for a safe-deposit box instead. It might be cheaper.
It could be... but did you factor in the cost of the risk of loss?
Deposit $10,000 in a bank, a fire breaks out, and you still have it in some form or another (even if it requires FDIC to intervene). Put $10,000 in a safety deposit box, a fire breaks out, and it is just gone.
Quite literally, that infrastructure and security to guarantee your deposits has a cost.
(Score: 0) by Anonymous Coward on Wednesday July 27 2016, @08:46PM
I'm not sure I'd call something that can't withstand a normal building fire a safe.
Then again I have no idea what banks use for their safe deposit boxes.
Might want to ask before getting one.
For a long time though I've been wanting to just keep all my cash under my mattress (well, in a fire-proof safe somewhere in my house) except for explicit investments.
(Score: 0) by Anonymous Coward on Thursday July 28 2016, @12:54AM
According to my friend who works with this sort of thing, the loss that costs the big bank the most money is water damage. Fires are relatively rare and they have fire suppression systems. The smoke damage is usually only in the top few layers. However, the boxes are not usually water proof, especially when you talk about high pressure fire hoses. In fact, his bank is seriously considering giving people waterproof containers when they sign up for a box; it looks like a free bonus, is cheaper than waterproofing everything, prevents smoke damage, and gives them a break on their insurance.
(Score: 2) by FatPhil on Wednesday July 27 2016, @10:17PM
Bank of Matress would have been better than some of my "investments" historically, so yeah, perhaps wodges of cash is the future. Have you seen the price of gold recently?
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