Customers of the ABN Amro bank in The Netherlands will no longer receive interest on their savings. Starting from April 1st 2020 the bank will lower savings interest from basically nothing to actually nothing. The zero percent interest is only for accounts with less than 2.5 million euro. Accounts with more money will pay 0.5% negative interest.
ABN Amro promised last year that it won’t introduce negative interest for customers with less than 100 thousand euro. Therefore it’s likely that the gap between 100 thousand and 2.5 million euro will get to pay interest in the next two years as well.
Other banks in The Netherlands, like ING Bank and Rabobank, haven’t announced a lowering of their interest yet. In Germany, Denmark, Switzerland and Sweden some banks already introduced negative interest rates. The European Central Bank (ECB) introduced negative interest rates in 2014 in order to stimulate the economy and have people invest and spend money instead of saving it.
Time for bitcoin to shine
Some argue that the negative interest rates are a stimulus for people to invest at least a part of their money into bitcoin. Of course the value of bitcoin is still going into all direction, but it’s not a bad idea to put one thousand euro in bitcoin. For of all, you keep full custody over your money. Secondly, only 50 million people use bitcoin at the moment. Billions still need to jump in, which means value as space to grow in the long term.
Having money on a bank isn’t the most secure thing in the world. A bank could go bankrupt, financial systems can be disrupted due to server errors, and there are plenty of others way users won’t be able to touch their own money again. We’ve seen this ten years ago.
The real problem isn’t the negative interest, but the fact that money loses its value. In 2019 the inflation in the European Union was 2.6 percent. If interest is 0% that means that your savings lost 2.6 percent of its value. If the inflation number remains this high, then the same amount of euros can only buy you fifty percent of what you’re buying now in like twenty to thirty years.
It’s not without reason that investors want to put a small percentage of their money into bitcoin. There’s a high risk involved, but an even greater reward.
Also published on Medium.