Let us say I have a £1,000. What
do I do with it? I could lock it in a
safe in the house and spend it when I need to.
Or I could go to someone and say, look, I’ve got some money that I don’t
need to use at the moment. Could you use
it? If you can use it and if I lend it
to you, let us agree a rate of interest that you will pay me for lending you
the money. We shake hands and I give
some of my money away.
That in effect is the relationship you and I have with the banks. We are lending them our money. But they twist it round to make it sound like
they are doing us a favour, providing services and so on. When the reality is, it basically is us lending
money to the bank.
So when we read in today’s papers about negative interest rates could
be coming to a bank near you soon, what does that mean? A negative interest rate means the central
bank and perhaps private banks will charge negative interest: instead of
receiving money on deposits, depositors must pay regularly to keep their money
with the bank.
In other words, it would be better to buy a really good safe and take
all you money out of your bank. Keeping
it in the bank will just cost you money.
Or perhaps that’s what the banks should be doing too until they can get their
act together and provide proper safe, reliable banking services.
You could of course go somewhere else like one of the increasing number of
organisations like GCU, the largest credit union in the UK, which offers loans,
savings policies and mortgages to people who live/work in the greater Glasgow 'G'
postcode. They are doing ethical and sensible services for people like you and me. With much less risk.
GCU are savings and loans company with a difference. Established in 1989 they are the largest and most successful credit union in
the UK. Fully authorised by the
Prudential Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority.
Maybe we should start to look for better places to keep our money.
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