14
votes
6answers
2k views

Why are interest rates on saving accounts so low in USA and Europe?

For example, in USA interest rates are 1-2% percents, while in Russia it is normal to have up to 8% anually for US dollars account. Same goes for Euro. For Russian ruble it can be up to 12%, but with ...
6
votes
4answers
640 views

Why can't the Fed lower interest rates below zero?

Ben Bernake said today that he can't lower interest rates further because they can't be lowered below zero. IIUC benchmark interest rates are determined by what someone is willing to pay in an ...
11
votes
3answers
509 views

When people say 'Interest rates are at all time low!" … Which interest rate are they actually referring to?

When we talk of 'rising interest rates' or 'falling interest rates', which interest rates are we referring to? - The interest given to the individual by the bank on a savings account? - The interest ...
3
votes
3answers
197 views

When the Reserve Bank determines the interest rates, do they take the house prices into account?

My knowledge of how interest rates work (please correct me if I'm wrong) is that it is set by the Central Bank of a country. They're supposed to be apolitical and independent and their decision ...
6
votes
1answer
1k views

How does the concept of negative interest rates work? Are there any examples of this?

This term has been proposed in economics, what exactly is it? I thought interest rates never fall below zero. How would this work? Wouldn't it actually be a penalty to depositor/investor or a bonus ...