The idea that you will get a negative interest rate on your bank account is an interesting one; certainly one that takes some getting used to.
Your first reaction is probably ‘Well, I won’t put up with that”. In reality you will, simply because you will have no choice. As the war on cash hots up, the war on the money in your bank account is getting the same hostile treatment.
Swiss banking group UBS are now charging their customers a negative interest rate of 0.6%. On the plus side you will have to have a million Euros in you account before you pay that but before you think you are off the hook, rest assured it will soon be rolled out to everyone. I expect the banking world will do it in unison to make sure you can’t change to different bank to avoid the charges. Just like now their will no competition because they are all in the same tufty club. Can you imagine finally becoming a cash millionaire and finding out that it actually costs you money to keep your cash with a bank?
Now you may be wondering why the banks are doing this. The answer is that the Central Banks now charge the local banks to have cash on account. The banks are simply passing that cost on to their customers. Just like the do with the multi-million pound fines they receive from the FCA for manipulating the markets.
Don’t be fooled by the current press reports saying that these fees won’t be passed on to the ordinary customer. We all know they will – just give them time.
Negative interest rates surely mean a return to cash.
Now, you would be forgiven for thinking that if you are losing money on your so-called savings with the bank, you would simply take your money out of the bank. This sounds reasonable enough but there are two things will stop you doing that. First up is the war on cash. You will either be charged for taking your money out or you will be restricted on how much you can withdraw – probably both. Most banks already have restriction s in place. If you pay £100k into your bank account it will be accepted in a microsecond. Just try taking that money out across the counter!
The second problem is that you always need money in your account to pay your bills on line each month. You will recall that although you’re doing all the work on line these days rather than visiting your local branch, you’re still being charged for the account as if the bank were doing all the work. basically you are screwed whichever way you turn. No wonder Bitcoin is becoming more and more popular.
Which is why I continually recommend you continue to hold sufficient cash to last one to three months and that you continue to build you stash of physical gold and silver.
As the Greeks discovered, when the ATM says you can only draw out £30 a day, writing a letter of complaint to your MP won’t make the slightest bit of difference.
Double your Way to a Million and you won’t care about negative interest rate charges.
Negative interest rates, particularly at a time of rising inflation, is bad news for anyone trying to make their money sweat. In the DYWTAM Programme I show how to double £100 x 14 times. The result would be a staggering £1.6 million bank account. Of course if you can do it once you can do it again. Why would you stop at £1.6m? My argument is fiddling around with small percentages is a waste of time. With over £1.6m in your bank account I reckon the negative interest rate the banks want to charge you would not be your biggest concern. If you can learn how to create 100% gains on your cash you won’t care a fig about 0.6% interest charges.