Letter: Banking Questions

Sir:

We only use our bank for a checking account to funnel our paychecks through and to pay bills. If banks go to negative interest rates or start confiscating accounts to cover their liabilities, what are we to do? Are we to switch to check cashing services and to money orders to pay bills? I am not seeing this addressed anywhere.

HJL Comments: Right now, the negative interest rates mostly affect interbank deposits. However, many have already seen the effects of fees, which make your bank account essentially a negative interest bearing account. If your monthly fee for having an account is ten dollars and the bank is only paying 0.1% interest on it, how much do you have to have in the account just to pay for the storage of that money and/or the use of the account? While using a debit card is a convenience, it allows the bank (and whoever has access to those records) to track your spending habits and mine them for metadata as well. SurvivalBlog has long advocated only keeping the cash in the bank that you need to operate with on a monthly basis. All other monies should be kept elsewhere and possibly in forms that are not so volatile.

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