Negative Interest Rates?
😱 Interest rates are negative? How is that even possible? What the heck does that mean? I thought rates had gone up?
Of course, the rates offered by banks now aren’t negative. If a rate appears negative, in all but the most unique circumstances you’re probably seeing the “real rate.”
🤔 What’s a real rate? It’s when you take a bank’s interest rate and subtract the rate of inflation from it.
A negative📉 real interest rate implies that the money you invest now will be worth more in the future. So if you see a low real interest rate, now might be a good time to invest.