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Isn’t cash the only thing preventing banks from offsetting the negative interest rates to the general public? For the time being people would just get out of t
by samsonradu 7y ago
Isn’t cash the only thing preventing banks from offsetting the negative interest rates to the general public?
For the time being people would just get out of their deposits but if cash gets banned then things become more complicated.
- JumpCrisscross 7y ago> Isn’t cash the only thing preventing banks from offsetting the negative interest rates to the general public? No, literally every investment product, from government bonds to CDs, also plays that part. Cash is just the most significant counterweight to negative deposit rates. (After taking into account fees, many depositors pay a negative rate to maintain banking privileges.)
- ImaCake 7y ago> (After taking into account fees, many depositors pay a negative rate to maintain banking privileges.) This isn't strictly true in Australia. Savings accounts where short term savings go typically provide 1 to 1.5% interest after adjusting for inflation (i.e 2% interest account with Australia's 1% consumer price index). If you don't have a mortgage or credit card debt, having money in an Australian bank savings account is usually a net positive.
- dannyw 7y agoBefore taxes.
- amadeuspagel 7y agoWhat about competition between banks?
- crististm 7y agoNot when you don't have a choice _not_ to use one.
- thatguyagain 7y agoCryptocurrencies seems to become the only "cash" alternative. Not saying I think it's a good (or bad) idea, but what else is there that resembles cash?