Negative Interest Rates Are Here…

LemonShapedRock on 20/07/2021 - 00:20

Hi all, I logged into Commsec this afternoon and saw that their “CommSec International Trading Accounts“ product will now charge a negative interest rate on cash balances in the following currencies Swiss Franc, Danish Krone, Euro, Japanese Yen and Swedish Krona.

FYI this is a product offered by Commsec to buy and sell international shares. It’s done via a partnership with Pershing (US Bank).
What does this mean for your CommSec International Trading Account?
Below is what I was sent via Commsec: “Due to monetary policy of global Central Banks, some foreign currencies charge a negative interest rate. In a negative interest rate environment, positive balances attract an interest charge as opposed to an interest return.

What does this mean for your CommSec International Trading Account?

Pershing apply an interest rate charge on positive balances in the below currencies. The charge rate applied is dependent on the cash balance in your account. Different charges apply for balances above or below the balance threshold.” Rates are: Swiss Franc -2%, Danish Krone -1.3%, Euro -0.8%, Japanese Yen -0.4% and Swedish Krona -0.85%

Financial

Comments

  • rektrading on 20/07/2021 - 00:30
    +1

    Negative interest rates, the SPX is crashing and Rona is partying harder than ever.

    The end is near. Get ready to back up the dry powder truck.

  • shangoz on 20/07/2021 - 05:57
    +2

    they done directly, but a lot of bank charge account keeping fee when balance down to certain level, plus less then 1% interest, so end up you are getting negative return, so, end result still negative interest

  • Scrooge McDuck on 20/07/2021 - 06:18
    +2

    So if I get a loan in Swiss Francs, it will pay itself off?

    • tomleonhart on 20/07/2021 - 06:55

      IT said positive Balance. Pretty sure your loan balance will be negative so no :P Go back swimming in your coins.

  • EightImmortals on 20/07/2021 - 06:35
    +1

    We're already going backwards and have been for a while. Once the rate of inflation (even the official rate) went higher than the interest we earn then the value of our fiat currency is decreasing every day.

    • Cheapskate Paul on 20/07/2021 - 19:50

      You pay tax on the interest earned too, so the devaluation is even worse!

  • burningrage on 20/07/2021 - 08:20
    +1

    It's probably only Pershing who is doing it.

    • LemonShapedRock on 20/07/2021 - 09:14

      Reading more into it you’re right. Just happens to be that CBA use Pershing’s for their international share trading

  • mrvaluepack on 20/07/2021 - 08:35
    +2

    Japan has already had it for the past decade.

  • Autonomic on 20/07/2021 - 10:18

    Those countries have had negative interest rates for 5-10 years.

  • Drakesy on 20/07/2021 - 11:42
    +1

    Much of Australia still thinks we successfully borrowed our way out of our recession that kicked in pre-covid.

    Unfortunately that's not how economies work and a government can't prop up it's own economy without ramifications (these being a massive debt bubble and inflation).

    Although deflation if the RBA wants to further postpone the hurt.

    • orangetrain on 20/07/2021 - 12:01

      Groceries, materials and house prices have risen sharply.

      You would expect interest rates to rise to combat it but nope, it goes down or steady. RBA says its because of "wages" and "government policy".

      We're on the path to a Zimbabwe economy at this rate since RBA and Federal Government rather sit on their hands (or do corrupt shit as usual with help of pro rich media).

      We overborrowed on a national and individual level.

      • burningrage on 20/07/2021 - 14:00

        I can feel groceries have gone up especially primary foods such as rice (rice used to be $1 a kg 10 years ago and now about $2.5 per kg for 22kg bags).
        One childcare I know of attributed their increase in fees due to food costs that went up by 20% in recent times. Up until last year, it was possible to eat for $10 per person but in 2021, this went up to $15.90. Plain Udon in Rice Workshop in 2018 was $6.60 and Omi has recently jacked it up to $9.90.

        I am surprised CPI was still very low. It doesn't seem to reflect reality.

        • FrugalDealHunter on 21/07/2021 - 08:07

          Inflation in US was reported at 5.4%. I rkn Aus follows US trends just lagged.

          House prices and car prices have definitely grown.

          Gov stats probably 3-6m out of date.

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