Back in the 2010s certain central banks lowered rates below zero so borrowers were effectively paid interest to take on the loans. It is a situation that should never happen but it did.
Sadly only the richest of the rich were able to take advantage of the sweet deal.
Interesting perspective, but negative interest rates are a double-edged sword. While they might seem like a free lunch, they're essentially a sign that the economy is struggling.
Banks are paying you to borrow money because they're desperate for cash flow. If the economy improves, those rates could turn positive, leaving you with a hefty bill.
There is always an investment that can be profitable in any economic environment. A free loan makes it even easier to profit.
Most of the loans were a fixed negative rate for some period of time so even when rates went back to positive your loan was locked in.
Banks were dumb to offer such rates and most would have gone out of business if Governments didn't back stop them.
Depends on the loan terms. If you give me a negative interest rate loan I will take as much as you offer, invest and live richly.
What is a negative interest rate?
Back in the 2010s certain central banks lowered rates below zero so borrowers were effectively paid interest to take on the loans. It is a situation that should never happen but it did.
Sadly only the richest of the rich were able to take advantage of the sweet deal.
I knew such a great deal wouldn't be for everyone.
that was a thing while rates where low, some banks penalized you for holding cash in your account. It was about -0,2-0,3 percent per year.
Interesting perspective, but negative interest rates are a double-edged sword. While they might seem like a free lunch, they're essentially a sign that the economy is struggling.
Banks are paying you to borrow money because they're desperate for cash flow. If the economy improves, those rates could turn positive, leaving you with a hefty bill.
Plus, investing in a down economy can be risky—you might end up losing more than you gain. It's a gamble, and not everyone has the appetite for it."
There is always an investment that can be profitable in any economic environment. A free loan makes it even easier to profit.
Most of the loans were a fixed negative rate for some period of time so even when rates went back to positive your loan was locked in.
Banks were dumb to offer such rates and most would have gone out of business if Governments didn't back stop them.