People paying banks to hold their money?

Imagine a world where you have to pay to deposit money into your bank account. As crazy as it sounds, if you live in the Eurozone or even in Japan, then you're already living in a region where this very scenario exists.

That's because a growing number of central banks have cut key interest rates below zero and depositors are now having to pay to keep their money in the central bank.

Called 'negative interest rates' they're just what they sound like: people have to pay to have money deposited in a bank. While it mainly affects commercial banks who have traditionally earnt interest on their money when they park it with the central bank, it now means banks are going to be charged more for leaving cash unused in the electronic vaults, rather than lending it to customers.

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About Sagar Pathak

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