The response of private customers to negative deposit rates

Analysis - April 2021 - No. 9

Authors Mandsberg, Rasmus Kofoed; Otte, Alexander Meldgaard; Spange, Morten
Subject Monetary policy; Monetary-policy transmission; Rates and foreign-exchange
Type Analysis
Year 2021
Published 27 April 2021
Abstract icon Negative deposit rates for household customers are now used by most banks in Denmark. Furthermore, the thresholds for when negative interest rates are payable have gradually been reduced. There are indications that household customers reduce their deposits when their bank announces negative interest rates. They also appear to react to the prospects of negative deposit rates by increasing their demand for investment fund shares and switching their deposits to pool schemes.