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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: 4, Insightful) by Dunbal on Wednesday July 27 2016, @08:12PM
The retarded idea is that it penalizes people that "save" money and forces you to spend every penny you have. For a ridiculous apparent short term "boost" to the economy. The problem is though if you've spend all your money, you won't have any for stuff you really need. No problem, the bank says, we'll LEND you some money (at interest). Gotcha. So basically even money becomes "rented".
Now this idea is completely flawed for two reasons. First, the incorrect assumption that individuals are not those who can best determine where they allocate their wealth. This flies into the face of economic theory but is VERY convenient for those who have monopolies and oligopolies, because they know that your dollars are invariably headed into their hands the minute they leave yours. The second reason is the ridiculous assumption that saving is somehow "bad". Because presumably when you have money in a bank account the bank just sits on your money and does nothing with it. Wrong. The bank takes your money and lends it out ANYWAY, so it doesn't really matter if you have "savings" or not - the money is STILL in circulation.
If you have savings in an account you are much more likely to consider many discretionary purchases with your income. If you have no savings, you are forced to spend your money - but on survival.
(Score: 1) by nitehawk214 on Wednesday July 27 2016, @08:28PM
Banks managed to convince the government that people saving money hurts the economy. That somehow the answer to our economic problems is to get individuals out there spending what little money they have left. That this will give us a short-term gain, boost confidence, and get politicians reelected. (hey, it might actually work)
And anyone with enough money to save any must be some evil rich person. (hey, they might actually be evil)
Of course this really only hurts middle class people that were trying to save up to buy a house because they were afraid to take a loan when the rates dropped through the floor in the crazy BUY BUY BUY EVERYTHING MUST GO era post-2009.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 4, Informative) by Dunbal on Wednesday July 27 2016, @09:12PM
This is all about slavery. If you have no savings and only debt, you work for the bank.
(Score: 1, Funny) by Anonymous Coward on Wednesday July 27 2016, @10:04PM
if you have no slavings
(Score: 1) by caffeinated bacon on Thursday July 28 2016, @02:20AM
If everyone is saving and nobody is spending. What kind of idiot do you need to be to borrow money from a bank and invest? You will just lose all your money. Better to wait until the economy recovers and spending picks up. Oops, it never will because people will just save more and more. Now that deflation has also kicked in and things are getting cheaper. Why buy something today when next month is will be cheaper? So people spend even less and save even more, and there is even less incentive to invest. Since all the businesses are now less profitable due to decreased spending, how many workers will be getting pink slips? Now there is even less spending, and also less reason to invest. This will not end well...