Imagine you have a piggy bank, and instead of giving you coins for saving, the bank takes them from you. That's like negative interest rates, when banks pay people to borrow money instead of charging them. Some countries do this because they want people to spend more and keep the economy growing.
Examples
- You borrow $100 from the bank and they give you $10 as a reward.
- A store gives you a discount for using your credit card, even when you're not buying anything.
- Your bank pays you to keep your money in an account instead of charging you.
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See also
- Why Do Inflation and Interest Rates Fight Like Rival Brothers?
- Why Do Inflation and Interest Rates Go Hand-in-Hand?
- George Selgin: Do we really need Central Banks?
- What are term structure of interest rates?
- How do central banks use interest rates to fight inflation?