12 ms·

So there are various ECB rates, the one that's key here is the deposit facility rate. It's the rate at which banks can deposit money with the ECB overnight. Thi

So there are various ECB rates, the one that's key here is the deposit facility rate. It's the rate at which banks can deposit money with the ECB overnight. This means if there's tons of excess deposits from customers, this rate applies. It's currently -0.5% so banks have an incentive to not become the bank of choice for cash hoarders, plus there's obvious incentives for many banks to try and push its users to other products such as brokerage which many banks offer in some form. This is why you find these negative rates in many more countries in Europe. The Netherlands and Germany, for example. My bank charges negative interest, too, above 100k.

wodenokoto 5y ago
100k what? Euro? That what be equivalent to the 750.000dkk limit parent listed as, old, initial limit that was lowered twice to reach the current 100k DKK limit. The news (at least to Danes) isn’t that the bank may charge negative interest, but the at they are starting doing to savings we might actually have in the bank.
- JohannesH 5y ago
  It's a 100.000 DKK limit. A Lot of people will be affected (not by much though). My girlfriend will have to pay about 300 DKK a year for having somewhere between 100k-200k in her account. I got my money in investments so I pay more than her in various fees, though I usually also make more while the market is climbing.
- IkmoIkmo 5y ago
  My post was mostly about the fact the ECB has negative rates, not a 0 or 0.5% rate as parents' comment listed. The 100k is just an example from my country to indicate the negative ECB rates have been affecting most EU countries. I think the more interesting discussion personally would be on inflation, rather than interest rates. In purely financial terms as an individual you tend to only care about purchasing power. I have a bunch of friends who're worried about paying -1% interest while they've held cash at 2-3% inflation for years.
  - wodenokoto 5y ago
    > I have a bunch of friends who're worried about paying -1% interest while they've held cash at 2-3% inflation for years. I agree with you very much on inflation being a hidden interest on all our money.

wodenokoto 5y ago

100k what? Euro? That what be equivalent to the 750.000dkk limit parent listed as, old, initial limit that was lowered twice to reach the current 100k DKK limit. The news (at least to Danes) isn’t that the bank may charge negative interest, but the at they are starting doing to savings we might actually have in the bank.

JohannesH 5y ago
It's a 100.000 DKK limit. A Lot of people will be affected (not by much though). My girlfriend will have to pay about 300 DKK a year for having somewhere between 100k-200k in her account. I got my money in investments so I pay more than her in various fees, though I usually also make more while the market is climbing.
IkmoIkmo 5y ago
My post was mostly about the fact the ECB has negative rates, not a 0 or 0.5% rate as parents' comment listed. The 100k is just an example from my country to indicate the negative ECB rates have been affecting most EU countries. I think the more interesting discussion personally would be on inflation, rather than interest rates. In purely financial terms as an individual you tend to only care about purchasing power. I have a bunch of friends who're worried about paying -1% interest while they've held cash at 2-3% inflation for years.
- wodenokoto 5y ago
  > I have a bunch of friends who're worried about paying -1% interest while they've held cash at 2-3% inflation for years. I agree with you very much on inflation being a hidden interest on all our money.