Over the past few days, some of Britain’s major banks including Santander UK, the Royal Bank of Scotland and UK-based commercial bank NatWest have been notifying their customers of potential implementation of negative interest rates on current bank accounts.
While the RBS and NatWest are yet to disclose the timeframe of the cut in their interest rates, one of Britain’s largest banks, Santander UK, has told its customers that the bank is decreasing the interest rate of its 123 Current accounts from 3% to 2%.
Santander UK’s 123 Current account has been serving millions of customers since 2012, and the recent announcement from the bank is set to cost its customers hundreds of dollars per year. Analysts and financial experts including Candid Financial Advice director Justin Modray stated that slashed interest rates are inimical to millions of bank account holders in UK.
“This is a bitter blow for savers. It's hard to see where those affected might move their money to earn a higher rate. Being cynical, I suspect Santander realises this and wants to boost its profits - though it may face a backlash from annoyed customers.”
Impact on Businesses and Organizations
The move from the UK’s largest banks could bring a detrimental impact to the operations of small companies and charities, which will soon have to pay a fee to keep their deposits in their respective banks. Small businesses, such as startups in specific, deal with banks on a daily basis to maintain their capital and reserve of cash.
However, if banks present unfavorable economic conditions for companies and organizations, naturally, they will begin to seek non-bank alternatives. This is where Bitcoin comes in. Bitcoin, as a decentralized digital currency, provides absolute control of money and finance to individuals and organizations. Thus, small businesses can control their money without the involvement of banks and dealing with their frequent alteration of interest rates.