The prospect of banks charging personal customers for holding their savings remains unlikely, despite a warning by Royal Bank of Scotland (RBS) and NatWest to business and commercial customers that negative interest rates could become reality.

The letter sent to 1.3 million RBS and NatWest business customers said "very low" global interest rates "could result in us charging interest on credit balances".

However, a spokesperson for RBS (which owns NatWest) says there was no precedent for charging personal customers negative interest rates, and that it had no plans to do so.

The warning comes as some economists predict the Bank of England base rate – on which high street banks' interest rates are based – will halve from 0.5% to 0.25% later this year.

The rate had been widely predicted to fall earlier this month, but the Bank of England's Monetary Policy Committee voted to keep it in place.

Interest rates in the UK are already at a historic low, with some savings accounts paying out as little as 0.01%.

Read our Top Savings Accounts guide to find the best return on your savings.

Martin Lewis
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Will I be charged negative interest?

This doesn't seem likely. The warning only applies to business and commercial customers, and even then it's just a prediction.

Normally, interest rates reward you by paying you for being 'in credit' – having a positive balance in your account. But a negative interest rate would result in you being charged for being in credit.

For example, if you kept £1,000 in a savings account paying -1% interest a year, then after one year you'd be left with just £990 – a loss of £10. founder Martin Lewis says the first bank to introduce negative rates would face mass desertion by its customers.

"The psychological impact of the actual money shrinking would be huge and you would see a swathe of customers, at a level we've never seen before, ditching any bank that imposed negative rates," he says.

What the banks say

Nationwide and Santander have confirmed they have no plans to charge commercial or personal customers negative interest rates, while Barclays says it wouldn't comment on "speculation" and would await the Bank of England's decision before arriving at its own.

HSBC tells us it has "no plans to apply negative interest rates to sterling business or personal accounts" but reserves the right to apply them to foreign currency deposits in some circumstances.

A spokesperson for Lloyds Banking Group, which includes Lloyds, Halifax and Bank of Scotland, says: "We regularly review rates across the range of products and accounts that we offer personal and business banking customers. The bank base rate is only one of many influencing factors."

Read our Interest Rates guide to learn more about how interest works for savings.

Additional reporting by the Press Association.

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