Looks like Negative Interest rates have arrived in the US

[bjl584]

Not sure what this means or if it will last long enough to have an impact

[amarowsky]

i recall this happening to japan a few years back. lol you money is more safe in cash than in a savings account, seems like a laughable premise... Really don't know what to think of -%' rates.

[Singuy]

Probably have a bigger affect on getting business to invest more using money that's sitting in cash reserve. And get people like Warren to invest more. This has very little effect on common Americans since their bank account is empty anyways.

[Joan.of.the.Arch]

I had not heard this. Here's a quick link for people like me who need a news story.

[disneysteve]

I haven't watched that full video yet so forgive me for asking a question that it probably answers. With a positive rate, I get paid to leave my money there. With a negative rate, will I actually pay to leave my money there? If I deposit $1,000, will I only get back $995? If so, why would anyone ever do that? Why not just stash cash under the mattress?

[Scallywag]

I haven't watched that full video yet so forgive me for asking a question that it probably answers. With a positive rate, I get paid to leave my money there. With a negative rate, will I actually pay to leave my money there? If I deposit $1,000, will I only get back $995? If so, why would anyone ever do that? Why not just stash cash under the mattress?

I don't know the answer to how much of your deposit you'd get back if you wanted to withdraw it but I would not stash cash under the mattress because then I could lose it to fire, anarchy, break-ins or riots. I did withdraw enough to buy TWO cashier's checks, each worth a month's rent. I will also withdraw some cash on March 31 to pay for 2 months' worth of gas & groceries. But the rest will stay with the bank. I don't feel comfortable having anything more than 2K to 3K under my mattress. Far too risky, esp NOW.

[Thrif-t]

These are negative rates for bonds not for savings accounts. From the article:

The negative rates, however, are not directly related to central bank policy. Fed officials have rejected the notion that the U.S. central bank might eventually take its policy rate below zero.

[disneysteve]

These are negative rates for bonds not for savings accounts.

So could you buy a 10K bond and get back less than 10K?

[Thrif-t]

So could you buy a 10K bond and get back less than 10K?

Yes! I listen to so many podcasts while I'm out walking I can't tell you who specifically had a question about this on one I listened to today. I believe it was a podcast called Jill on Money, maybe.

Said if you let the gov't borrow 1000 you would get back 995 at maturity, made up numbers.

[disneysteve]

Yes! I listen to so many podcasts while I'm out walking I can't tell you who specifically had a question about this on one I listened to today. I believe it was a podcast called Jill on Money, maybe.

Said if you let the gov't borrow 1000 you would get back 995 at maturity, made up numbers.

Why would anyone do that? Why not just buy a CD that at least pays interest?

[Thrif-t]

I mean this just happened I'm sure those who bought in earlier didn't think about this happening. Not sure if anyone will buy new bonds now with negative interest rates.

They say it won't happen to our savings accounts but what if it does? It has in some places on Europe. What will you do?

Should we be locking into some long term cds with our savings??? I don't know? I pray it doesn't come to that, but I realize it might.

[disneysteve]

They say it won't happen to our savings accounts but what if it does? It has in some places on Europe. What will you do?

Should we be locking into some long term cds with our savings??? I don't know? I pray it doesn't come to that, but I realize it might.

I would not put money into any account where I would actually lose money, even a fraction of a percent. Even 0% would probably be a no.

[Thrif-t]

So disneysteve will you be pulling your money out of the banks should they go to negative rates? Will you keep your cash at home in a safe?

[disneysteve]

So disneysteve will you be pulling your money out of the banks should they go to negative rates? Will you keep your cash at home in a safe?

I honestly don't know. Even if banks go negative, there might still be "safe" investments that have a positive return like brokerage money markets, municipal or corporate bonds, etc. I'd be seeking out whatever options there are. If it actually came down to nothing but paying for them to hold my money, then yes, I'd get a safe deposit box at my local bank and fill it with cash as long as the cost of the box rental was less than what I'd lose on the account.