Negative Interest Rates? How’s that work?

Question

Negative Interest Rates? How’s that work?

In: Economics

Answer 1

Positive Interest: Your bank pays you for using your money to investigate/give loans.

Negative Interest: You pay to your bank for keeping your money safe.

Advanced economies (such as Danish, German, Japanese) can have hard times too. Like economic slowdown. I need to give an example to explain this.

Let’s say you have 1 million euros. You can deposit it to a bank and live with the interest of it for the rest of your life while doing nothing. That doesn’t help your country’s economy. But instead of this governments always want to make you invest your money to produce more money.

Let’s say you have 1 million euros. When you found a brand and export something to other countries that helps your country to make money. Thus, governments time to time wants people spend their money. It can be investing, spending for holiday etc. to avoid economic slowdown.