I see news that in Germany banks are asking people to take the money to other banks and need to pay bank negative interest to keep money.

A co-worker pointed a strategy that we can possible use in USA, and that is to keep the money with Bank, but at same time get a cashier's check issued leaving less money(effectively) in account as Bank will withdraw that money from Account immediately so Balance will be less ( so will accrue less [negative] interest) and at the same time, do not deposit the cashier's check till the check expiry nears and keep the check safe.

So the question is, will this trick work if and when interest rate goes negative in USA?

Note: some points in comments are.

  • Theft of cashier's check
  • forfeiture of FDIC
  • 4
    I'm not sure how this trick "can possible use in USA" if we're talking about negative interest rates at German banks. I see no reason that a German in Germany couldn't do this. On the other hand, paying 0.5% in negative interest to insure against the potential loss of a large check seems pretty reasonable. I know that I wouldn't bet on my ability to keep a check safe for a year at 200:1 odds. The risk of fire, theft, forgetfulness, rabid wolve breaking in to my apartment and eating it are too high. Mar 3, 2021 at 21:23
  • 6
    The idea of paying interest to keep money in the bank rubs the wrong way, but 0.5% is not a terrible amount; that's $50/yr per $10,000. As for keeping a paper "pay to bearer" check safe, would that be any different (other than physical size) than just withdrawing the same amount in currency? If the bank offers a safe deposit box, it could be put there. In the US, withdrawing the money would forfeit any FDIC protections. Since the linked article talks about "two of Germany's biggest banks" charging, I would simply find a smaller, more eager bank.
    – spuck
    Mar 3, 2021 at 23:43
  • 1
    Just FWIW there's usually a small fee to create such a cheque. I guess it's an ingenious idea to put money in a sort of limbo where theoretically you save on that annual fee!
    – Fattie
    Mar 4, 2021 at 12:18
  • 2
    Is this stunt really necessary? Those banks normally only apply negative interest rates to large deposits (typical threshold is 100 000€). First, most people do not have that much cash sitting in their bank account (especially those on an investment forum) and one can easily circumvent this by having accounts at multiple banks. This sounds a lot safer than having a check hidden under your mattress
    – Manziel
    Mar 9, 2021 at 7:34
  • 1
    Many US banks already (effectively) charge negative interest rates in the form of monthly fees. Fortunately, they're easy to work around.
    – RonJohn
    Aug 6, 2021 at 1:18

2 Answers 2


Is it possible? Sure.

Is it wise? That seems unlikely at least where interest rates are in Germany today. Even if you have to pay 0.5% annual interest to keep money in the bank, that is likely to have a positive expected value over keeping a paper cashier's check. There would often be a small fee to get such a check. Even if your bank would give you a check for free, you'd have to have less than a 1 in 200 risk of losing the check in order for the strategy to have a positive expected value. That's well in the range of the risk most people have of experiencing a flood, fire, or other natural disaster. Plus the risk of theft or forgetfulness. And most people are rather risk averse so you'd need the risk to be much less than 1 in 200 for them to willingly gamble $10,000 in the hopes of winning $50.


Might I suggest reading this Investopedia article on negative interest rates?


Negative interest rates fall into a couple different categories. If a central bank has a negative interest rate policy in place, it is their way of "encouraging" lending, since a negative interest rate means the banks have to pay for un-loaned capital they hold on their books. It's a sort of penalty for not being more liberal with lending policies. Rarely will you see negative interest rates being offered by banks to customers, especially in the U.S.
Why? Banks in the U.S. are constrained in their lending by their capital reserves, which are dictated by customer deposits. So, a bank can only loan a certain amount of money (usually a multiple of its capital reserves) and is dependent upon more deposits by its customers to add to that amount. Charging customers to keep money in the bank would have the opposite effect, chasing customers from that bank to competitors who either don't charge a negative rate at all or whose negative rate (assuming everyone is charging it) is less. I don't see such a thing happening here in the U.S., if for no other reason than it is bad public relations. Better to offer no interest at all than to tell customers they have to pay to keep their money in its accounts.

  • it is very good information, what I am looking for is pros and cons from customer's point of view for using cashier's check if interest rates becomes negative in USA
    – puzzled
    Mar 9, 2021 at 3:23

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