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That isn't applicable since the bank invests my savings already and doesn't just keep it in a safe. It could also mean that any amount you borrow would result
by raxxorrax 5y ago
That isn't applicable since the bank invests my savings already and doesn't just keep it in a safe.
It could also mean that any amount you borrow would result in you paying back less. It would be a negative interest rate...
- SonicScrub 5y agoIt's completely applicable if the returns the bank can make are less than the operational costs associated with storing your money. The offered interest rate is going to be some function of the bank's operational cost subtracted from the bank's investment return. When interest rates set by fiscal policy are so low that the bank can't make enough through investing deposits to offset the operational costs, negative interest rates must occur.