Free Republic

Dear Chuck, I can’t wrap my head around negative interest rates. What does this mean for my savings accounts in the bank? Can you help me figure this out? Confused about Rates Dear Confused,You are not the only one who finds this a challenge to understand. Simply put, it inverts the model that we have known and practiced for years: putting savings (money) in the bank to earn interest not to pay interest!Some History and Bigger Picture Negative interest rates have historically been used to combat deflation. Finance writer Justin Kuepper explains,“...deflation causes people and businesses to hoard cash rather...