Thursday, February 12, 2015

Think about this for interest rate announcement – Swedish newspaper Svenska Dagbladet

Think about this for interest rate announcement – Swedish newspaper Svenska Dagbladet

The Riksbank’s statement negative repo rate means that the banks have increased costs – they get ahead simply pay to put their surplus with the Riksbank. There is a cost to the bank of course want to cover up – and there’s likely you into the picture.

We have seen examples in other countries where negative deposit rates imposed on ordinary savings accounts as a result of the central bank’s negative policy rate. An example is the Danish bank FIH Erhvervsbank, where customers on some accounts soon have to pay 5 dollars for each inserted tusenlapp.

It should be emphasized that Sweden already in practice pay for our money in the bank. This is because the interest on many accounts at zero percent while we pay card charges, often over 200 per year, to get the money.

The question is whether the major Swedish banks now formally before interest penalties on savings accounts. It is unlikely, though possible.

Negative savings rates, although they would be low, would arouse the anger of many customers. There is a risk that they largely want to withdraw their money and instead have them in the mattress – a scenario that is anything but desirable from the bank.

Therefore teaches several banks argue that it is better to cover up for the increased costs by raising other fees. From a consumer perspective, it would be better understood if the costs levied at source, so that there is a fair chance that the investor select or deselect.

Another possibility which the Bank is to let mortgage customers pay for the increased costs. By tradition, we know that it is on mortgage interest rates that banks seem to be most alert on increasing margins, and they would now be able to lower mortgage rates less than what is actually justified.

If so, this will hardly anyone from the public hold snatch out to bolånetagarnas defense. Lower mortgage rates and the risk of even higher debt is viewed from, inter alia, the Riksbank’s perspective, the scourge of current interest rates.

So how do you as an individual act now?

A trade account, checking account and simple savings account, you must have regardless of zero interest or less interest. The salary must be put somewhere, direct debit payments must be drawn somewhere, and we need to have some availability for some of our savings.

However, you should let today’s rate decision be a wake where the question of how much money you actually need to have on the savings account to a head.

The motto? Yes, there should be “no more than necessary.”

An important part is to have an accessible buffer. Money you may need to use within the next six months. This money should you have in an account with a niche bank deposit insurance.

The part of the savings that can be dispensed with in maybe a year or two you should have the savings account, but in low-risk funds. Money market funds provide too little to be trouble – or rather the charge – host. Corporate Bond Funds are an option, but watch out for some types at high risk.

Balanced funds is another possibility, although one must beware of excessive fees. For savings in the longer term, stock market, and mutual funds be that applicable. Traditionally, low interest rates favored the stock market, and this has also kick started the year.

Although the tax on investment savings account and endowment are affected by interest rates, and therefore it is on these platforms, you should have savings. This year, the tax is only 0.27 percent, but it should be even lower next year because low interest rates will persist until at least the fall of 2016, according to the Riksbank’s forecasts.

As for mortgages is the low interest rate already largely priced into today’s market, which has led some banks in recent weeks lowering interest rates. But interest rates on mortgages should be able to drop even more. Those who are looking to bind the mortgage should be able to have a cool head and wait some more.

As a bank customer you have to constantly keep track of adverse changes in conditions. This may seem particularly provocative when big banks while making big profits and dividends million. An old truth is that you can only win against the bank in a way – by itself be a shareholder. But you can reduce the loss by taking active control of your own personal finances.

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