Jump to content

Negative interest


Recommended Posts

I don't get it... how can banks offer negative interest on cash holdings?  I'm hoping someone on here knows more than I do.  Natwest, RBS and now HSBC are threatening negative interest to business customers and not ruling it out for personal ones.  Now, I understand how central bank negative interest works, same with negative interest on bonds, but surely cash is cash.  It's a net capital asset for the bank holding your money so how can they get away with charging you interest on your own money then raking in excessive profits on their other products.

"When in deadly danger, when beset by doubt; run in little circles, wave your arms and shout"

Link to comment
Share on other sites


You were happy to take the free cash from positive interest, and now you don't want to divvy up your share of the negative interest?  For shame.

With the best, thats a good bit of PR, though I would say the Bedford team, theres, like, you know, 13 blokes who can get together at the weekend to have a game together, which doesnt point to expansion of the game. Point, yeah go on!

Link to comment
Share on other sites

"raking in excessive profits on their other products"   Quite so.  They want to use the BoE base rate when it suits them.  They lend to businesses at punitive rates of interest - 8 % 10% 15% and more. Same with personal loans. Why are they not linked to the BoE base rate?  Rate margin is too high by far 0 surely a few % is enough..  The only exception is domestic mortgages where once again we are seeing borrowers making a killing at the expense of savers.

Link to comment
Share on other sites

On my business account I'm charged a monthly fee and a fee every time I deposit cash as it is, charges in the form of negative interest rates would have me switching elsewhere for sure!

Link to comment
Share on other sites

On my business account I'm charged a monthly fee and a fee every time I deposit cash as it is, charges in the form of negative interest rates would have me switching elsewhere for sure!

I used to bank with the Co-op for my business banking: free banking, free cash deposits (up to a fairly decent limit), free everything else plus a £25 bonus each year.  Only catch is that you had to be a Federation of Small Businesses member.

"When in deadly danger, when beset by doubt; run in little circles, wave your arms and shout"

Link to comment
Share on other sites

It was suggested by a BBC reporter when this was announced that those particular banks are threatening this to nudge the Bank of England not to lower interest rates.  But they would only go negative themselves if the BoE goes negative, which it won't do as there is still a quarter of one percent interest to charge if it wants to cut further (which I reckon would be foolish at this stage).

 

There was a time when all banks charged for all sorts of things like cashing cheques and arranging overdrafts, etc, so maybe we'd be going back to those times?

Link to comment
Share on other sites

It was suggested by a BBC reporter when this was announced that those particular banks are threatening this to nudge the Bank of England not to lower interest rates.  But they would only go negative themselves if the BoE goes negative, which it won't do as there is still a quarter of one percent interest to charge if it wants to cut further (which I reckon would be foolish at this stage).

 

There was a time when all banks charged for all sorts of things like cashing cheques and arranging overdrafts, etc, so maybe we'd be going back to those times?

Why should a bank charge me for the privilege of me lending them money?  That's effectively what a positive cash balance is, after all.

"When in deadly danger, when beset by doubt; run in little circles, wave your arms and shout"

Link to comment
Share on other sites

Wait, wait what are you lot on about?

You can put money IN to a bank? Is this something new?

I know my employer used to put it in..... and I took it out, I spent it and now your telling me I should put some back.

I'll never get used to these new ideas.

Ron Banks

Midlands Hurricanes and Barrow

Link to comment
Share on other sites

Why should a bank charge me for the privilege of me lending them money? That's effectively what a positive cash balance is, after all.

keep it under your bed then.

We have become accustomed to free banking over here and i dont think it has led to a great culture within banking with ancillary products like ppi making the profit rather than offering core banking services for a standard price.

Not unlike rl, people always want others to pay for it.

When my wages go into the bank i now have the luxury of being able to spend securely using plastic in millions of places, can withdraw from all major banks free of charge, and many banks will even pay you for that service.

Id rather see the regulator enforce sensible pricing rules which allow for sensible margins on all products.

No bank should be able to sell a single product where they know they will lose money.

Also, anybody complaining about Personal Loan rates of 3.3% apr is off their head.

Link to comment
Share on other sites

keep it under your bed then.

We have become accustomed to free banking over here and i dont think it has led to a great culture within banking with ancillary products like ppi making the profit rather than offering core banking services for a standard price.

Not unlike rl, people always want others to pay for it.

When my wages go into the bank i now have the luxury of being able to spend securely using plastic in millions of places, can withdraw from all major banks free of charge, and many banks will even pay you for that service.

Id rather see the regulator enforce sensible pricing rules which allow for sensible margins on all products.

No bank should be able to sell a single product where they know they will lose money.

Also, anybody complaining about Personal Loan rates of 3.3% apr is off their head.

But banks make money off every card transaction. They use our money to lend to others to make them more money. I'm not asking for lots from them, just a recognition that they're not doing me a favour in housing my money.

I run my bank account in permanent positive balance, I have a zero overdraft arranged, I have no credit cards and no loans. I'm the least profitable customer class for a bank yet they still get a good benefit from having a persistent balance they can use to make more money and also all of the card transaction fees, albeit smaller debit card ones.

"When in deadly danger, when beset by doubt; run in little circles, wave your arms and shout"

Link to comment
Share on other sites

Wait, wait what are you lot on about?

You can put money IN to a bank? Is this something new?

I know my employer used to put it in..... and I took it out, I spent it and now your telling me I should put some back.

I'll never get used to these new ideas.

 

You're right. I never put money in. My employer does (I have no say in that and cannot choose otherwise). I then take out all of that money to pay for the necessities of existence in this country. And now they're contemplating charging us for this essential transaction medium? Are we able to "opt out" of this to avoid charges and take cash directly from our employer instead?

Link to comment
Share on other sites

The original post referred to business accounts.

I have a personal account in France with a French bank and I have to pay a monthly charge, annual card fee etc. And there is a full menu of charges if I want the bank to actually do anything.

Link to comment
Share on other sites

keep it under your bed then.

We have become accustomed to free banking over here and i dont think it has led to a great culture within banking with ancillary products like ppi making the profit rather than offering core banking services for a standard price.

Not unlike rl, people always want others to pay for it.

When my wages go into the bank i now have the luxury of being able to spend securely using plastic in millions of places, can withdraw from all major banks free of charge, and many banks will even pay you for that service.

Id rather see the regulator enforce sensible pricing rules which allow for sensible margins on all products.

No bank should be able to sell a single product where they know they will lose money.

Also, anybody complaining about Personal Loan rates of 3.3% apr is off their head.

3.3 per cent APR? Where can I get one of those. Do tell!

Link to comment
Share on other sites

The original post referred to business accounts.

I have a personal account in France with a French bank and I have to pay a monthly charge, annual card fee etc. And there is a full menu of charges if I want the bank to actually do anything.

 

I bank with the Co-op. I too, pay a monthly charge.

Link to comment
Share on other sites

3.3 per cent APR? Where can I get one of those. Do tell!

Obviously don't know your credit rating but the following are offering some great deals

 

Sainsburys, Tesco, M&S, HSBC (all at 3.3% or 3.4%)

 

Alternatively, take a credit card and if you can get a high enough limit you could buy a car or holiday and pay 0% interest for a couple of years (most car/holiday companies will charge you a fee though).

 

Consumers have never had it so good if they have a great credit rating, unfortunately I think it leads to banks looking for income from other streams that customers don't really need/want from their bank.

Link to comment
Share on other sites

You're right. I never put money in. My employer does (I have no say in that and cannot choose otherwise). I then take out all of that money to pay for the necessities of existence in this country. And now they're contemplating charging us for this essential transaction medium? Are we able to "opt out" of this to avoid charges and take cash directly from our employer instead?

Yes, there are loads of bank accounts where you won't pay anything, even for the services you do use - like your debit card.

Link to comment
Share on other sites

But banks make money off every card transaction. They use our money to lend to others to make them more money. I'm not asking for lots from them, just a recognition that they're not doing me a favour in housing my money.

I run my bank account in permanent positive balance, I have a zero overdraft arranged, I have no credit cards and no loans. I'm the least profitable customer class for a bank yet they still get a good benefit from having a persistent balance they can use to make more money and also all of the card transaction fees, albeit smaller debit card ones.

It does always astound me that people have to pay for business banking for things that consumers get for free, but I suppose they can charge it as people will have to pay it.

 

On your last paragraph, there are plenty of accounts that will pay you interest for holding a balance which is surely the recognition you are craving?

 

Costs of funds are so low that I expect your bank are losing money on you as a customer. The margins really can be miniscule.

Link to comment
Share on other sites

Why should a bank charge me for the privilege of me lending them money?  That's effectively what a positive cash balance is, after all.

Maybe they will be offering loans where they pay the customer to borrow money from them.....or perhaps not.

Link to comment
Share on other sites

It does always astound me that people have to pay for business banking for things that consumers get for free, but I suppose they can charge it as people will have to pay it.

On your last paragraph, there are plenty of accounts that will pay you interest for holding a balance which is surely the recognition you are craving?

Costs of funds are so low that I expect your bank are losing money on you as a customer. The margins really can be miniscule.

As my post above says though, I had free business banking and it wasn't a low quality account either. Full privileges with dedicated business bankers available.

On personal accounts, if my bank said it would charge me interest then I'd be cutting my money in there to the bare minimum to pay my direct debits. And so would many others. And that's when the bank would collapse as it would run out of working capital very quickly.

"When in deadly danger, when beset by doubt; run in little circles, wave your arms and shout"

Link to comment
Share on other sites

As my post above says though, I had free business banking and it wasn't a low quality account either. Full privileges with dedicated business bankers available.

On personal accounts, if my bank said it would charge me interest then I'd be cutting my money in there to the bare minimum to pay my direct debits. And so would many others. And that's when the bank would collapse as it would run out of working capital very quickly.

aye, business banking isnt my background hence me talking only about personal, but I agree with you on the last paragraph, thought it was a strange thing for RBS to come out with.
Link to comment
Share on other sites

Obviously don't know your credit rating but the following are offering some great deals

Sainsburys, Tesco, M&S, HSBC (all at 3.3% or 3.4%)

Alternatively, take a credit card and if you can get a high enough limit you could buy a car or holiday and pay 0% interest for a couple of years (most car/holiday companies will charge you a fee though).

Consumers have never had it so good if they have a great credit rating, unfortunately I think it leads to banks looking for income from other streams that customers don't really need/want from their bank.

3 and a bit % is certainly their headline rate but don't want to go through the process of applying to see what the actual rate is. Don't currently need or have any loans but could be tempted to borrow for a new motorbike!!:-D

Link to comment
Share on other sites

3 and a bit % is certainly their headline rate but don't want to go through the process of applying to see what the actual rate is. Don't currently need or have any loans but could be tempted to borrow for a new motorbike!!:-D

genuinely credit cards could be the best option for a purchase like that if people want to use credit.

At least 51% of all people will be given the 3.3% headline rate.

You can use sites like Moneysupermarket which will tell you likelihood of getting accepted across a range of suppliers without damaging your credit rating and registering multiple searches.

Link to comment
Share on other sites

Is there not an opportunity to make some free money here?

 

Loan at 3.3%- Same amount put into a Club Lloyds 4% and TSB 5% current accounts with standing orders set up between them to meet the min pay-ins. 

 

Free cash?

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.