How are negative interest rates gonna work?? (fees, cash, deposit)

[ss20ts]

Originally Posted by ncole1

How easy is it to insure large sums of physical cash in a homeowner's policy?

It's called a safe. Ask your insurance agent about it. There's this amazing technology called photography. You can photograph the serial numbers.

[J.Thomas]

The only problem Central Banks have is they don't know how it will work.

For centuries we've been relying on some sort of cash.

Smartphones, smartwatches, tablets, wearables...etc will play a major role for this.

Another thing is small notes.

Can you imagine withdrawing a grand with 10 notes

We won't want to carry these small notes.

But hey why should i be worried??

Central Banks don't have a clue and i don't have a clue either.

I'm safe.

[Ultrarunner]

I sold a car for $2500 dollars to a collector years ago and he paid with 3 bills...

Two $1000 notes and one $500 note...

Went straight to the bank and made my deposit.

[PacoMartin]

Originally Posted by J.Thomas

We won't want to carry these small notes.

Many countries by policy never declare banknotes invalid. They simply stop producing new ones and often destroy the ones that are returned because of wear and tear.

The first one to discontinue large banknotes was USA in 1969 who stated that they would no longer produce the $500,$1000, $5000, and $10000 banknote. Roughly $5.5 billion was produced before WWII, and they were not declared invalid, but they slowly vanished into the collector's market.

In the 1990's Sweden discontinued the 10,000 Swedish Crown banknote which was worth about US$1800 at the time. Sweden does declare old notes invalid. In 2000 Canada discontinued the $1000 banknote. They are all still valid, but all the remaining notes (roughly a million) are still circulating among the criminal elite.

The Monetary Authority of Singapore (MAS) has said it will stop issuing 10,000-dollar (SGD) banknotes (equivalent to about $8,000) on 1 October 2014. But they are still circulating about 13 million 1000-dollar (SGD) banknotes.

The Swiss 1000CHF banknote (worth roughly $1000) is probably the most valuable banknote today, with about 44 million in circulation.

Germany was circulating 93.5 million 1000DEM banknotes in 1999, and that number was reduced to 45.6 million by the end of 2001 in anticipation of the changeover to the Euro. The €500 banknote was equivalent to the 1000DEM banknote, but over 360 million of them were produced before 1 January 2002. Within 7 years that number rose to 530.1 million, and another 83.5 million were added in the next 7 years.

So it is not just the value of €500 banknote, but that there are far more in circulation than any other high denomination note in history.

The most interesting experiment today is Sweden destroying over 90% of it's 1000SEK=$120 banknotes in the past 8 years. There is a long list of reasons (most of them positive) for almost completely removing this modestly valuable banknote from circulation, but within the topic of this thread, they were not replaced with an equivalent value of 500SEK banknotes. Banks in Sweden keep on hand about 370SEK=40EUR per capita in banknotes and coins, making a significant attempt to convert large numbers of bank accounts into cash because of negative interest rates nearly impossible.

As was pointed out, a million dollars in $20 banknotes weighs 110 lbs, so you would need at least a full size safe. A million dollars in $100 banknotes weighs 22 lbs, so it can be moved in a single briefcase. But a million Euros in 500Euro notes (2000 notes) could probably be sewed into the lining of a heavy coat.

[tamajane]

Originally Posted by Ultrarunner

The manager said the branch was low on cash and it was on a Friday afternoon.

Of course they do have reporting requirements for larger withdrawals.

I just was not going to pay $5 for to get a bank check...

They had the cash. They are told to discourage "large" cash withdrawals, which 6500 is not or should not be. Fine to use that as a strategy to get your bank check fee waived, but if you really were trying to withdraw the money they were going to make it difficult. They should not be making the customer uncomfortable about transactions. Just let customer know 10K transaction is required to be reported and the rest need not be an issue but lately banks are using tactics to try to prevent one time transactions of even a few thousand. That is a serious problem.

[Ultrarunner]

When I sold my Mustang I made a $8000 cash deposit in $50 and $100 bills... that too was questioned...

I run everything trough my Checking Account... keeps it simple.

Off topic... when I buy a car I complete the transaction at the window of the Motor Vehicle Office to make sure title issues don't come up later.

[Lowexpectations]

Originally Posted by tamajane

They had the cash. They are told to discourage "large" cash withdrawals, which 6500 is not or should not be. Fine to use that as a strategy to get your bank check fee waived, but if you really were trying to withdraw the money they were going to make it difficult. They should not be making the customer uncomfortable about transactions. Just let customer know 10K transaction is required to be reported and the rest need not be an issue but lately banks are using tactics to try to prevent one time transactions of even a few thousand. That is a serious problem.

The bank has every right to ask what you are doing with the funds, you don't have to answer however. AML procedures sure allow for a fair amount of questioning

[HappyTexan]

Originally Posted by Lowexpectations

The bank has every right to ask what you are doing with the funds, you don't have to answer however. AML procedures sure allow for a fair amount of questioning

Why ? It's your money that you let them keep for safekeeping.

It's YOUR money, not theirs although they tend to think it is.

[Lowexpectations]

Originally Posted by HappyTexan

Why ? It's your money that you let them keep for safekeeping.

It's YOUR money, not theirs although they tend to think it is.

No bank thinks your money is theirs so stop with the nonsense. The bank has every right to ask what the purpose of the withdrawals are for and you have every right not to answer. I'm really not sure what you are asking why about but banks are required to have AML procedures in place and included in those would typically be inquires into the purpose of withdrawals or transfers, the origination of deposit and a host of many other variables.

Also on a very basic level the bank knowing what it's for might have a better alternative for the customers other than carrying larger amounts of cash. As was the case above, a bank check for free or alternatively a wire transfer might be a better option. I've asked clients before and offered up better solutions, it's not always about an info grab

[ncole1]

Originally Posted by ss20ts

It's called a safe. Ask your insurance agent about it. There's this amazing technology called photography. You can photograph the serial numbers.

Ok, so then you have to consider the cost of the safe in addition to the (miniscule) lost interest.