What to do with the “deeply negative” rates that threaten your money?

The october 30, 2020

Economist Kenneth ROGOFF is at the origin of the theory of "deeply negative" rates, putting a real risk on your bank deposits: taxation.

It all started in June 2014 when the European Central Bank (ECB) decided to set a negative interest rate for the first time on the amounts deposited with it by commercial banks. This is also the path chosen by the Central Bank of Sweden since 2009 and by that of Japan since 2016.

In short, banks must now pay to deposit their liquidity with the Central Bank. The same goes for interbank rates, that is, the interest rate charged between commercial banks when they lend money to each other.

The objective of this unconventional monetary policy is thus to encourage banks to inject these sums into the economy by lending them to households and businesses rather than letting them sleep with the central bank.

According to Kenneth ROGOFF, these negative rates could be passed on to individuals in the very near future. Several banks in Germany, Switzerland and Denmark have already implemented a tax on their customers' deposits.

What is the risk of seeing this phenomenon affect France? In reality this is already the case! The private bank Lombard Odier has applied this type of fee to deposits exceeding 1 million euros since October 2019. More recently, it is the online bank N26 which announced its decision to apply a tax of 0.5% per year from € 50,000 in assets, which therefore concerns French people with an account with this establishment.

The generalized taxation of current accounts from the first euro could therefore take place much earlier than we think ... A paradigm shift in the direction of the development of cryptocurrencies which could well take an increasingly important place in our daily lives .

 

To deal with the inevitable taxation of your savings, just one watchword: anticipation. Invest and place your money on secure and profitable media: financial, real estate and other diversification investments (gold, forests, vineyards, etc.). To be accompanied by a wealth management professional, make your consultation request via our website: wealth-a7.com!

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Article by : Orane TREHET

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