Yes essentially you are paying part of your principal each year if the rate is actually negative - you're paying them. The reason is because the central banks

Yes essentially you are paying part of your principal each year if the rate is actually negative - you're paying them. The reason is because the central banks have set rates that private banks themselves can loan out money (i.e. create money out of thin air), that you have to compete with their low rates to loan out yours. For example, say you wanted to loan out your money for someone to buy a house. You're competing with banks who can do so at 3%, so you can't go higher, and there is a risk the guy won't pay you back. Since the government is usually the least risky entity to whom one can loan money (since they can print it), the rate you can charge them is even lower than every other type of loan, and since everyone else is loaning at lower and lower rates for riskier ventures, the government ends up paying 0%.