If you had a billion dollars you wanted to keep safe, what would you do with it? If you think the markets are going to do poorly, you might not want to invest it there.

You could just put it into a bank account, but what if that bank goes under? You are only insured by the FDIC up to $250k. You could put it into 4,000 different banks (essentially every bank in America) each with an account of $250k. But imagine the overhead of opening and keeping track of those. How many accountants will you need to have on staff full time? And lots of banks charge a monthly fee if you aren't making transactions every month.

So are you going to take it in cash? If so, where will you put it? You'll need storage, security, insurance... what if the insurance company goes bust and can't pay out?

All those options are very expensive. But you have the option to put that money into a US government bond, the safest place in the world, and it won't cost you a dime. Free storage.

In Europe, there were actually cases of negative interest rates. So people were paying a little bit of money to loan to the government because it was still the safest and cheapest way to protect their enormous sums.

> And lots of banks charge a monthly fee if you aren't making transactions every month.

This is never going to apply to people with $250,000 deposited with the bank. Lots of banks charge a monthly fee if you aren't making transactions and also don't have any money.

Make a large interest-free loan to the bank, and they won't charge you fees for the privilege of making it.

> But imagine the overhead of opening and keeping track of those. How many accountants will you need to have on staff full time? And lots of banks charge a monthly fee if you aren't making transactions every month.

Many retail brokerages will sell you CDs commission-free and keep track of everything for you. They get a commission from the bank for selling them to you. Schwab has a CD search tool with results that keep going page after page after page. I'm sure if you had a billion dollars they'd be happy to have a broker make the purchases for you.

CD is as risky as the issuing bank. If the bank bankrupted, the CD money is gone, down to the FDIC insured amount.

What? Obviously I'm not saying that you'd buy more than $250k of CDs at a single bank. Where are you coming up with this?

Then you are back to the original problem of the overhead of managing 4,000 different CDs. I think you'll negate any gains and maybe likely lose money.

For example, Switzerland currently has the highest negative interest rate in the world. [1][2]

[1] https://www.reuters.com/article/us-snb-results-banks/swiss-b... [2] https://www.ft.com/content/bcc092fc-7743-11e6-a0c6-39e263316...

> You could put it into 4,000 different banks

Or set up 4,000 different legal entities and deposit it all at one bank.

Then that's 4,000 state filing fees, possibly 8,000 tax returns. 4000 1099-int forms... Talk about an expensive nightmare.

Negative interest rates have been a fantastic economic phenomena of the last decade. https://www.ft.com/content/312f0a8c-0094-11e6-ac98-3c15a1aa2...