Topic: Negative interest rates in Germany (Read 557 times)

I do not know if the same rules apply in other countries, if that's me I'm not going to keep my money in the bank maybe I will buy property or anything that generates profit and avoid inflation,Bitcoin is good but too I will put 10-20% of the total assets, And also you don't get a monthly return if only buy it but only increment the value if saving it in the long term, i prefer cashflow than capital gain.

They will only lend the money out when someone will actually need it .
They cannot go home to home and then lend money , one more thing is that , sometimes banks have huge amount of interest for the people who are taking the money and thus they prefer the bank with low rates when it comes to lending , it could help the people since the banks will now lower their interest rates and people will get the money at a much lower interest.

Maintenance as it is. If it were secured though why not stocking it, in such bank. Though talking money wise, everybody would literally be switching choices right away. And I as well, who would've like to get their money lower than it is. Besides, those wealthy enough people wouldn't care about such thing existing. Not worthy of their attention.

It can't survive.

That's why Moody's has downgraded German banks 3 days ago:

https://www.cnbc.com/2019/11/21/moodys-downgrades-outlook-for-german-banking-system-to-negative.html


There are going to be some spectacular bank failures in the next five years.

It shows that in the current system saving money in the bank doesn't increase your purchasing power, the life gets more expensive while the interest the banks give you is less or much less than that. in an inflationary system you lose around 2% or more of your purchasing power if you keep the money in your bank or under your bed. Rich people invest in bonds and stocks and they gain more than what the price of living increases, let's say they gain 5%, so overall they gain 2% each year. You need to invest unless you want to get poorer, and only the rich people do, because poor people don't have any money left to invest.

Now everyone could understand the power of Bitcoin. In a deflationary system you gain purchasing power just by saving because prices tend to go down, so just by keeping your bitcoin you gain, let's say 0.5% each year. This works for both the poor and the rich. If you want to make more than that, you will have to take a much bigger risk.

The same as Japan.
I cam up with a question.
How the bank will survive if less people put the money in the bank?

Well that goes for cryptos aswell in the economic recession. The only thing that will hold its value or instead increase its value is basic needs. all these tertiary instruments are the ones that will lose its value first. In my opinion negative interest is okay only if it's temporary and not too long more specifically not decreasing the amount of money I hold significantly. Investing into real estate also has some risk considering that it's actually a bubble that could pop out anytime soon. The real estate investment is definitely overrated and too expensive nowadays. I'd just prefer to buy some lands if that is the case.

Are you joking? Europe has some of the most Bitcoin friendly governments, including Switzerland and Germany. Their tax laws regarding to cryptocurrency is also very liberal, when compared to that in other countries such as South Korea, United States and China. On the other hand, Asian countries such as China and India have some of the most restrictive laws related to cryptocurrency.

Europe looks not good countries become interested with bitcoin as legal currency payment, we never find in Europe country want serious for adopting and discussing about bitcoin or altcoin, they never try to discuss with public about how to use bitcoin and altcoin as legal payment transaction, bitcoin only have good thing on  Asian country because many countries support using bitcoin as legal curerrency.

The thing is, Japan really does have deflation, so the negative interest rate might be justified. If the deflation is bigger than the negative interest rate, the saver makes a profit.

Germany has positive inflation. The negative interest rate is because other countries in the eurozone like Greece and Italy have deflation.

That means German savers have twin evils of negative interest rates AND inflation. So they're taking losses.

Oh, yeah, every time you come to bitcointalk you must come across something like this.
We've just learne that Germany is underdeveloped!!!
I have nothing to add to it...nothing, speechless!


You could run for chancellor! I have the perfect slogan!
"'Bring Germany out of the stone age, Again!"


Yeah, I heard the Deutsche Mark is dropping every week like Venezuela's bolivar...
There are no more shops accepting the Deutsche mark anywhere!!! Run for the hills!


Germany doesn't need money, the debt is going down and year after year the government is having a budget surplus!

I cannot see this reason logical from having negative interest rates. It does not makes sense at all since having multiple bank accounts is the same as having one, rates are still the same.

As they follow such monetary policies they had nothing to do but to have negative rates, It is also for their clients to be safe as central bank are facilitating and holding their commercial bank reserve. It's not new for European country. The main reason why the german central bank is doing this is for them not to enter debt in least way possible cause if they do their economic stance would be at large.

Negative interest rates are not a new phenomenon. More than a decade ago, Japan started this by charging a negative interest rate of -0.10% or -0.20% on certain types of bank deposits. But then, you can't compare the JPY with either the Euro or the United States Dollar. JPY has increased its exchange rate against the USD by almost 4x during the past four decades. On the other hand, the purchasing power of Euro goes down with every passing year and they don't have any excuse to charge negative interest rates.

There is no more reason for keeping money in the banks if this is the situation. I better keep my own money at home. The banks are becoming useless instruments in this way. They better be closing their offices and stop holding the money of people if what they can give in return is a negative interest. For large sums of money, it is better to keep them in real estate and Bitcoin. Stocks are also in danger if the economic situation is in disarray.

this is not new , many european banks have been doing the same
I guess its the common Central bank's policy around the globe , so much for "independent" countries and their " independent" monetary policies
everything is dictated from above , with a few exceptions all european countries follow same rules
the banking percent may vary from country to country , but if Germany keeps it negative expect all of the europe to follow the trend and either set negative % or make it as low as possible
on one hand as an interpreneur I can only applaud , in ideal world this should facilitate loans and even lower the percent I would have to pay if I took money from a bank
but again , reality is different , you will be hit with the same interest from the bank despite them literally forced to loan away the money an not to sit on them
try walking into a bank and ask for a 20.000 euro zero interest loan to start a business and you will see

You probably have little knowledge on how the economy of a country works. Always saving money in the bank will help people earn interest but it won't help the overall development of the country. Again, negative interest rate is a monetary policy which affects the commercial banks. The commercial banks stores their reserves in central bank. Once the negative interest rate has been applied, the commercial banks will have to start paying the central bank money in order to hold their reserves. Thus it becomes expensive for them to do that and that is why the commercial banks instead of holding the money starts to give the money to the people as a loan with a very low interest amount. Thus people get more money to spend on their lets say business which will help in overall development of the country.

I think that was the case in some Asian countries. This is all about inflation.
Even Japan has a negative inflation rate, ie, deflation.
For people living in such countries, it makes more sense to invest in cryptocurrencies and get 10% annual interest. You can make USDT stakes on many exchanges, including Binance, and can earn yearly interest income.

Maybe Because the customers are already paying the service fee and it from no angle, can be named that. Banks are Just trying to keep the excess Reserves while paying the negative interest with help of its customers. That is actually very clever of them. It would have been much better if people start investing in cryptocurrencies. This way, they will stay away from all such tricks. They are also the future currency.

Despite what was done by the German Bank, it could lead to pros and cons, especially among the German people themselves.

There are some developed countries and also the Central Bank still do the way like Germany, negative interest rates, for example, as we know now, namely Japan.

From the Bank itself must have strong reasons about this, this decision is effective for educating commercial banks, for this matter it is usually believed to be able to reduce their aggressive lending, this is a common reason issued by the central bank of each country.

Basar possibility in my opinion towards Germany, about the news now negative interest rates, this will lead to factors very enthusiastic in determining the currency for the German country itself.
I'm sure this will trigger monetary policy towards banks in Germany today.
I think this news is to save them, the German central bank from borrowing money.

 wow, this shows that Germany is really underdeveloped in terms of economy. In fact, negative interest rates have existed for a long time but they only appear in times when the economy is gradually going into crisis or trade war.
This is a worrying sign for Germany and commercial banks are forced to operate at full capacity for the country to develop again. We can expect the German currency to decline in the near future.

No worries, banks don't shy away from that kind of service fee. They just usually hide them by splitting them up into monthly fixed costs as well as penny and diming you for every bit of service on top.

Take a look at this price sheet, for example:
https://www.raiffeisen.at/eBusiness/services/resources/media/1021497204966-NA-1279548085059316048-1-30-NA.pdf
(the numbers will differ depending on the branch, but the pricing structure is usually pretty much the same)

Including taxes and ignoring compound interest they already charge you more than 0.5% in service fees for storing investments fonds by chipping away 0.039% plus tax on a monthly basis.

Luckily there are banks that focus on investments and charge much much lower fees. But most people simply get screwed over by their banks on a regular basis, no matter if they stay in cash or stocks.

If you want to charge -0.5% of 100,000, that's 500 euros per annum. Which is a pretty large service fee. It looks smaller if you say it is a negative interest rate!

I mean, that's one way of the government telling you to either lose money not doing anything or spend it on investments like the ones you've talked about in the OP.

This might be a way to encourage more commerce and businesses inside of Germany, from my understanding was that they where doing fairly well in regards to economic development, and that's one of the main reasons why you would decrease interest rates, so I'm a bit confused at the move.

To be fair, a lot of the people I know barely have anything in the bank - it's all tied up in their assets.

According to the general view, a negative interest rate means a customer who keeps his money in a bank, instead of getting interest, the customer is required to pay. Financial institutions that put their money in the central bank also incur negative interest rates.

In Germany itself applies -0.5% negative interest rates. This step was taken to boost public consumption and encourage economic growth. Reluctance to spend money causes the economy to not move, it is expected that the implementation of negative interest rates will attract people to fund and spend it in the productive sector.

Germany has a choice, can choose between consumption by saving (saving) or investment and can encourage one of them while sacrificing the other. In my opinion, the German people will choose to invest in gold.

In accordance with one of the articles I read that With a population of about 82 million, of which 69 million are over 18 years old, the survey says that 38% of people or 26 million German adults own gold in the form of bars and coins, 61.5% or 45 million adult Germans have gold jewelry, while 14.5% or 10 million people have gold ETF (a kind of securities guaranteed by gold) or similar products such as Xetra gold and Euwax gold. (Source: https://www.zerohedge.com/news/2019-04-28/vast-gold-hoards-held-germanys-population).

Why is it that there are individuals who save their money in the bank, assuming that the bank is still the safest and cheapest place to save their money compared to the depreciation of money due to negative interest rates. Straying money at home is very dangerous and saving money in a safe deposit box is also expensive. In addition, saving money in a bank is identical to the ease of conducting transactions everywhere without the need to carry cash.

It was to be expected. I am actually surprised it didn't happen sooner. I have seen various economists predict negative interest rates to hit major countries last year, but at least, it still happened.

The problem now is that we could very well see it spread out like a virus because not lowering interest rates means that you are losing money unnecessarily, which is something banks are not going to allow to happen.

I'm having an idea on why lately there were banks in my country (not Germany) that announced the service fee they will start getting from withdrawals and deposits which was free before, maybe we're also affected.

Those options you have were the best IMO although bitcoin isn't doing well today, I think that I'm on a better choice. I don't have bonds though because I don't think that it suits my investing style.

These Keynesian economists have the "mantra" to always "peg" the interest rate 1-2% below the inflation rate. It is interesting to see if this situation could go deeper or would bounce back to positive numbers. Either way is not going to solve the economic problems in the long run.

I remember reading an article stated that they could apply this negative interest rate even if you are saving in the form of paper cash. In other words, it's a form of forced double taxation.

It's quite alarming that day by day we are looking forward to the crisis, not only Germany but also many other countries are passing a huge monetary liquidity crisis, Although their banking system is getting developed, this type of problem will remain in the future because people will withdraw their money from bank for purchasing cryptocurrency, I think in this way, there is a chance of getting accepted crypto to the people around the world, so Holding cryptocurrency is more profitable than depositing money in the Bank, so why not they are buying crypto because of a security purpose, If there is a proper regulation then it would become the most used platform in the current world.

i remember Antonopolous was saying about why anyone would try to put their money on banks. You already entrusted your money to the bank, they hold you money and yet they are still asking for fees because they are holding your money.  i was then thinking, why did anyone ever asks them about it. its one of the question i might throw to an agent if i find myself talking to them.

To many bankers and economists this is totally normal. I dont know why.   Nothing will change before USA will also have negative interest rates. That should happen in 2021 or even next year.

The novel aspect of the Furstenfeldbruck Bank is not that they're charging negative interest rates. That is already relatively commonplace in the Euro zone (like @stompix already wrote). But it seems to be one of the first examples where also small private clients are affected ("from the first Euro on") as most other banks only charged to businesses and wealthy customers with holdings from 100K upwards.

I believe that this could trigger a run into cryptocurrencies, but maybe not in Bitcoin but into stablecoins like Dai or BitUSD which pretty much are like a "bank account without bank" (only that fees are pretty high). Bitcoin needs to stabilize more first to be attractive for the masses, it's still too volatile, like the current "slow downtrend" shows us - 2%-5% losses at some days may not seem catastrophic crashes but already are more than the "negative interest rate".

That's actually what most banks are doing. Bank accounts have become more expensive in the last years. Even some "online-only" direct banks with low costs are charging monthly fees now.

@Vishnu.Reang : European Central Bank's negative interest policy is mainly caused by the low inflation rate. The ECB wants an inflation of 2% but inflation was near 0% in 2015 and 2016. Since 2017 it's growing again but still lower than 2%. (I'm not making a statement here about if this policy is good or bad and if inflation should be actually lower; but it's their kind of reasoning.)

And the bloodily govt turn a blind eye on these open robbery from taking place, tell ya every bloody bank would pay for what they did to the bitcoin, negative interest is the bottom line we can accept, they’re just trying to test our patience, but many dumb❤️❤️❤️❤️ are too afraid to take action, and only Satoshi have the balls to start the fire since 2009, now I don’t see many people are up to the task too.

Euro is a inflationary currency and there is no valid logic behind charging negative interest rates. Even in Japan (where the currency is deflationary), the interest rates are positive in most of the cases. This is a very stupid move from the European Central Bank and will result in the banks (and the HNW individuals) finding some other alternative to storing their money in the central bank.

I don't understand countries that insist on negative interests. The reasoning could be whatever they want, sure they can give you a solid reason if you push them and it may sound amazing when they say it but the reality is they are basically forcing you to spend your money.

There is no reason for anyone to force you to spend your money so the government could get a bit load off their shoulders by citizens investing their money into everything and building the country instead of keeping it on their books. I believe that high interest equals high inflation and that is not something we could handle right now in the world since high inflation is a problem in many countries. But, you can find a sweet spot of 1-2% interest rates that would not only allow people to save money but also be risk free.

I only see two reasons why, either they are doing this to prevent people for creating multiple bank accounts on their bank or force the existing ones to deposit more money to them. Either way they are risking losing their small depositors because of this method since they think they will grab more money because of this kind of strategy. Because their is a strong chance that a lot of people will lose interest to them especially if other banks don't have that negative interest rate.

Inflation is actually like 1.5% and 2% less than Inflation rate is a Pretty normal interest rates which banks offer in every country. Yet negative interest rate is more like a temporary situation once people start to spend money instead of holding things would then get rectified as inflation would grow a bit due to increased economic growth and then banks would once again make positive interest rates.

Bonds are even worse than just keeping money in the bank right now. Bitcoin is... well, gotta love Bitcoin, but one also has to admit that it currently doesn't fit everyone's risk profile.



I think a lot of the general populace still sees stock investments as a form of gambling. Even when investing conservatively via index funds you still might wind up with your funds being held up in a negative position over a prolonged time when a bear market strikes. This is further aggrevated by everybody and their dog expecting the next bear market being just around the corner especially since the current global boom cycle is already lasting for an above-average timeframe.



Investing in real estate takes money. Like in most countries, real estate ownership has become pretty much non-achievable during the last 10 years. In most areas the cost of real estate has more than doubled during the last decade or so, with disposable income staying pretty much the same. Not a good recipe for increasing home ownership. Especially with the middle class being squeezed through all age groups. The young are fucked because they were born too late for fetching good real estate prices. The old are fucked because the pension system is failing them. I think most people do want to achieve home ownership. It just has become pretty much impossible for most.

I think that a lot of people can't shake the memories of huge inflation and interest rate when it was quite the investment to have your money in the bank, you could get 200% back in a year, and the inflation was just ...300%..lol

Anyhow, hardly news, 2017
German companies hit by negative interest rates




Yeah, as fast as the snail mail. Inflation is around 1% in Germany, fast as in decades.
Bitcoin dropped 2.46% today...what should we call this, mach3 speed?


Again it shows just how stupid those Germans are. I mean they should look at other European countries that have a  high rate of ownership like Romania, Latvia, and Hungary, I'm pretty sure the average german is envious as the wealth of Romanians, even Monaco is red with envy.
No wonder they've lost two WW and their country is poor as *
They even have a budged surplus, man!!!!

I don't understand why they didn't rename it as a 'service fee'. Free banking isn't a thing at all in quite a few places.

I have a bit of money in the bank. It's not there for investment purposes. It's there to be spent. I'd shop around if one place implemented this but wouldn't bust a gut doing it.

They don't have to invest in stocks in Germany. They can invest all over the world, wherever they find a profitable opportunity.

Also, they can invest in real estate. The mind boggles at Germans continuing to rent in old age, while keeping their money in banks that charge negative interest rates. That's a recipe for getting poor.

And of course people can always invest in bitcoin. Though that needs a certain appetite for risk, and I guess those people who are keeping their money in banks despite negative interest rates are extremely risk averse.

because their country usually doesn't hold much cash because they realize the danger of this action. A bank is what keeps their assets safe and also helps the economy grow if you send money through the bank.
I agree that the investment will be good but you know, the German economy does not grow so so if you invest in stocks, companies cannot increase the value of the stock due to the economy. Slow down and in danger of recession. Therefore, bank deposit is still the first choice for those who do not have the knowledge to invest.

The European Central Bank has long had negative interest rates of -0.5% charged to banks that keep their excess reserves at the central bank. The thinking is that this will discourage banks from holding excess reserves and they will instead lend the money out.

Unfortunately, not only are the banks continuing to hold excess reserves, they have now decided to charge their customers negative interest rates to make up the losses:

https://cointelegraph.com/news/german-bank-boosts-bitcoin-negative-interest-rates-hit-every-account


If you were a customer in this situation why would you continue to hold money at a bank? Remember that inflation is positive in Germany, so a negative interest rate at the bank combined with inflation in the economy means your wealth gets eroded fast. Better to hold stocks, bonds, real estate or bitcoin.