It Begins: Dutch Bank ABN Amro Will Charge Negative Interest On Deposits

[rangerrebew]

It Begins: Dutch Bank ABN Amro Will Charge Negative Interest On Deposits
Secular Investor's picture
by Secular Investor
Jul 24, 2016 9:53 AM
 

Source: ABN AMRO Website

One of the largest Dutch banks, ABN Amro, has now warned its business clients a negative interest rate on the business accounts is in the works. The bank is currently updating its terms and conditions and will more specifically include its right to reduce the interest rates below zero as the bank wants to ‘protect itself’ against the continuously changing market circumstances.
 

Source: ewtdotorg.com

Even though this is a very interesting development, this isn’t really completely unexpected as the company’s CEO has released some ‘test balloons’ in the past. But this where it gets really interesting. ABN AMRO still is a government-owned and government-run bank. The bank’s CEO , Gerrit Zalm, wasn’t someone from the financial sector, but used to be the Netherlands longest-serving Minister of Finance being in office for no less than 12 years (or three complete terms).

Not only is it intriguing to see the bank that is being led by a bureaucrat rather than a banker being the first one to formally start talking about charging customers to park their money at the bank, it’s also very interesting to see it’s a government-owned bank taking the first step.

http://www.trunews.com/article/dutch-banks-rolling-out-negative-interest-rates

[Fishrrman]

Headline:
"Dutch Bank ABN Amro Will Charge Negative Interest On Deposits"

If this is the case, why keep your money IN a bank, any more? In a "paper account", that is -- or these days, an electronic account.

Wouldn't one do as well by withdrawing the "paper funds", converting it to hard cash (either "real" cash -- paper money, or perhaps to gold or silver), and then store the paper or coin or metal billets somewhere safe?

I would put my money into a bank (or into a currency fund, such as a bond fund, etc.) for two reasons:
1. To earn some interest or financial return (even if small),
or
2. To "not lose" face value.

Why put it into a bank to LOSE value?

Aside:
Some will say that putting money into a savings account or investment that pays interest that is lower than the rate of inflation is "losing money". So be it. At least the nominal dollar value of the account isn't being depleted...

[geronl]

Imagine paying the bank to hold your money.

Imagine all those private retirement accounts being drained as fast as you contribute.