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Because the government provides the strongest guarantee of that money being there in the future. Banks can go bust or your money can get embezzled and so on.
by treis 5y ago
Because the government provides the strongest guarantee of that money being there in the future. Banks can go bust or your money can get embezzled and so on.
- mjn 5y agoIn particular for larger amounts of money. Many countries have deposit guarantees for smaller amounts, so for most individuals it wouldn't make any sense to buy negative-interest bonds. For example, someone in the U.S. who wants to store $250k with a government guarantee can simply put it in an FDIC-insured bank account. I believe Germany is similar, though with a lower €100k guarantee per account. You can go a little higher by having multiple accounts at different banks (at least for FDIC insurance, the first $250k at each separate bank is covered). But if you have $10m or $100m to store, government bonds become the only practical way to get a similar level of insurance.