One bank CEO outlines what will happen to your bank account if the Fed takes interest rates negative (PNC)

Navesh Chitrakar/Reuters

Since the European Central Bank and Bank of Japan moved their interest rates negative, a debate has swirled over the practical and theoretical impacts of the move.

But according to the CEO of a major US bank, if the US federal Reserve were to do the same it would have a serious practical impact on customers' bank accounts.

Analysts at Deutsche Bank hosted meetings with PNC Bank's chairman and CEO Bill Demchak last week and addressed the possibility of negative rates.

The answer was simple: "If rates go negative, consumer deposit rates go to zero and PNC would charge fees on accounts."

This means that customers who hold accounts at the bank would have to pay PNC, the 10th largest bank in the US by assets, a fee to hold the money in the bank instead of vice versa.

And while interest rates may be paltry now costumers go earn something, even if a minimal amount, for parking their cash at the bank. 

For example, in New York City a PNC savings account with under $2,500 earns 0.01% interest monthly, and 0.05% if you have a PNC checking account, according to the company's website. Standard savings accounts with over $2,500 earn 0.10% interest with a PNC checking account.

In terms of fees, a PNC savings account with under $300 in average monthly assets is charged a $5 a month service fee. This is waived if the balance is above that threshold.

But based on Demchak's remarks, however, it seems these fees are likely to increase.

Earlier this month, Federal Reserve Chair Janet Yellen was asked extensively about negative interest rates during congressional testimony. She said that while the Fed is investigating the impact of such a move, it is unlikely to happen anytime soon saying "we have work to do to judge whether they would be workable here."

And with the Fed seemingly intent on raising interest rates, a cut to negative territory is very much speculative at this point. But the market is certainly asking about it.

And while the initial market-based evidence suggests negative interest rates have been bad for the global economy, this is among the first evidence on how this move could impact regular consumers in the US.

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