Is there such a thing as negative interest rates?

[bluestateguy]

Could that feasibly happen here? And if so, would that be a good thing or a bad thing?

[HillbillyBob]

1. They pay you to take a loan?

I don't think its possible or likely.

[no_hypocrisy]

2. Negative interest rates like the depositer pays the bank for the "privilege" of keeping

his/her savings?

[immoderate]

4. It's called checking.

--imm

[immoderate]

5. Self delete.

[daylan b]

6. +1

[ipfilter]

10. It's happened with US Treasuries.

[DrDan]

3. sure - "penalties for early withdrawal"

Invest in a 3 year CD and withdraw your funds at the end of year 1. You may not get all your investment back.

[immoderate]

7. Sure.

You borrow, and pay back less than you borrowed. It's an idea worth considering.

On edit: A form of that would be "forgiveness."

--imm

[KT2000]

8. I think they are using the term fees

[BzaDem]

9. There can be negative REAL (inflation adjusted) interest rates.

If inflation is 5% but the fed funds rate is only 3%, that is essentially a -2% rate.

There is no such thing as a nominal negative rate though. Why? Because the mattress pays 0%, and that beats negative rates.

[Cicada]

11. we have negative interest now

I think some very short term US treasury obligations recently traded at a price exceeding their principal amount> For instance the US is obligated to pay $10,000 in 21 days but the instrument sells for $1010. The note bears
"negative interest."