They have done this here in denmark, if you have over (i think) 250k dkr / 38k $. they acrue negative interrest. Not that you would ever see any positive anyway.
With a bond you would buy it for over face value (the dollar amount you receive when the bond matures), and the face value + interest received is less than what you paid for the bond (eg. you pay $101 for a $100 1 year bond at 0% interest which you hold until it matures: the bond yield is -1%).
With a bank account I assume they just take some percentage of the value of your account as a "fee".
They have done this here in denmark, if you have over (i think) 250k dkr / 38k $. they acrue negative interrest. Not that you would ever see any positive anyway.
How exactly do negative interest rates work? After your bank scoping trace as a certain amount it loses money?
With a bond you would buy it for over face value (the dollar amount you receive when the bond matures), and the face value + interest received is less than what you paid for the bond (eg. you pay $101 for a $100 1 year bond at 0% interest which you hold until it matures: the bond yield is -1%).
With a bank account I assume they just take some percentage of the value of your account as a "fee".
By the way, functionally, this works as the bank charging you a percentage fee to look after your money.
I frankly don't know. Apparently the negative rates are mandated from the state bank/controller thing.
I wouldn't be surprised if the bank kept the money somehow.