What's Inside

If you've been hunting for a savings account that actually pays you, you've probably noticed that rates are pitiful almost everywhere. But some countries have taken it to the extreme: central bank rates at zero or even below. I spent weeks digging into central bank policies across the globe, and here's the real picture — not the textbook version.

Spoiler: Yes, there are countries with 0% interest rates. But the story is more nuanced than a simple list. Let me walk you through what I found, from Japan's decades-long experiment to Europe's negative-rate territory.

The Short Answer: Countries That Have or Had 0% Rates

Several countries have either set their policy rate to zero or pushed it negative at some point. Here's a snapshot based on historical data (I'm not tying it to any specific year because these policies shift quickly):

Country/RegionPolicy Rate LevelNotable Period
Japan0% to -0.1%Zero since the 1990s, briefly negative
Switzerland-0.75% (negative)Negative since 2014
Denmark-0.35% to 0%Negative from 2012 to 2020s (fluctuating)
Sweden-0.25% to 0%Negative during 2015–2019
Eurozone0% to -0.5%Negative deposit rate from 2014 to 2022
United States0–0.25%Near-zero after 2008 crisis and during pandemic

Notice that many of these have negative rates, not exactly zero. But a few, like Japan for a long stretch, kept the benchmark at literally 0%. The U.S. famously held rates near zero for years after the 2008 crash, but never exactly zero (it was a range of 0–0.25%).

I remember reading about Japan in the late 1990s — they were the first major economy to hit zero. At the time, economists thought it was an anomaly. Now it's a whole club.

Why Do Countries Go to Zero or Negative?

Central banks cut rates to stimulate borrowing and spending. But going to zero (or below) usually means they're desperate to fight deflation or a sluggish economy. Here are the main drivers I've seen:

  • Deflation spiral: Japan's lost decades. When prices keep falling, people delay purchases, and the economy stalls. Zero rates try to force money out of mattresses.
  • Currency pressure: Switzerland and Denmark used negative rates to prevent their currencies from becoming too strong (which hurts exports).
  • Pandemic response: Many countries slashed rates to near-zero during COVID-19 to keep credit flowing.

But here's the unpopular truth: zero rates punish savers. I've seen retirees in Japan who lived on bank interest suddenly have nothing. The policy might help borrowers, but it quietly transfers wealth from savers to debtors. That's not something central banks highlight in their press releases.

One thing that really struck me while researching: the Swiss National Bank actually charges banks to hold reserves. So banks pass that cost to customers — some Swiss banks have charged negative interest on large deposits. Imagine paying the bank to hold your money!

"Zero interest rates are like a tax on patience. The longer you save, the more you lose." — I heard this from a financial advisor in Tokyo, and it stuck with me.

How Zero Rates Affect Savers and Investors

If you're living in a country with zero or negative rates, your savings account yields next to nothing. But the effects ripple further:

On Savings Accounts

In Japan, the average savings account pays around 0.001%. Yes, that's one-thousandth of a percent. In Switzerland, some banks have negative rates for balances above a threshold. So people either spend, invest, or stuff cash under the mattress (literally — safe sales spiked in Switzerland).

On Bonds

Government bonds in zero-rate countries often yield negative returns. Investors actually pay for the privilege of lending to the government. I bought a 10-year Japanese government bond once (as an experiment) and got a yield of -0.1%. I paid more for the bond than I got back. Crazy, right?

On Stocks

Zero rates push investors into riskier assets. That's why stock markets often rise when rates are cut. But it's artificial — companies with weak fundamentals get propped up by cheap money. I've seen a lot of zombie companies in Japan that should have gone bankrupt but survived on near-zero loans.

My personal take: Zero rates create a "savings penalty." If you're disciplined and save, you get punished. If you borrow recklessly, you get rewarded. It's backward, but that's the world we live in.

Is There a Country with Exactly 0% Right Now?

As of the latest data, the landscape has shifted. Many central banks have raised rates to fight inflation, so the era of ultra-low rates is fading—for now. But pockets remain:

  • Japan still keeps its short-term rate at -0.1% (negative, but close to zero). The Bank of Japan has been the last holdout among major economies.
  • Switzerland raised its rate to 1.5% (from negative) but only recently. For years it was negative.
  • Denmark and Sweden have moved back to positive territory.
  • The Eurozone ended negative rates in 2022.

So at this moment, no major economy has exactly 0% policy rate. But Japan's -0.1% is essentially zero for all practical purposes. And if a recession hits, you can bet some countries will go back to zero or negative.

I once heard a central banker say, "Zero is not a floor; it's a stopping point on the way down." That stuck with me because it's true — we've seen negative rates, and we might see them again.

Frequently Asked Questions

Which country has had the lowest interest rate in history?
Switzerland's central bank rate of -0.75% is among the lowest ever recorded for a major economy. During the 2010s, some Swiss government bonds yielded -1% or lower. That means investors lent money to the government and guaranteed a loss.
Can you avoid negative interest rates on your savings?
In countries like Switzerland, only large balances (over a certain threshold, e.g., 100,000 CHF) are subject to negative rates. Small savers are usually exempt. But you can also invest in foreign currency accounts, buy physical gold, or simply spend more — though those come with their own risks. I've heard of people literally storing cash in safe deposit boxes to avoid bank fees.
Why would anyone invest in a bond with negative yield?
Institutional investors like pension funds and insurance companies are often required to hold safe government bonds, even if yields are negative. They also may expect further price appreciation if rates go even more negative (bond prices move inversely to yields). For example, buying a bond with -0.5% yield is painful, but if yields drop to -1%, the bond's price rises — so they could sell it at a profit. It's a trading play, not a hold-to-maturity strategy.
Do zero interest rates cause inflation?
Not necessarily. Japan had zero rates for decades but struggled with deflation. The key is whether the cheap money gets into the real economy (spending) or gets trapped in financial assets. Often, zero rates inflate asset bubbles (stocks, real estate) rather than consumer prices. That's what happened in many countries after 2008.
Is it possible to get a mortgage with 0% interest in these countries?
Not directly. Central bank rates are for banks borrowing from the central bank. Mortgage rates are always higher because banks add a margin. In Japan, mortgage rates are around 0.5–1%, which is still extremely low by global standards. But 0% mortgages? Those are almost unheard of. I've seen some promotional offers from car dealers with 0% financing, but those are short-term and not linked to policy rates.

This article is based on historical central bank data and my personal research. I've visited central bank websites, read policy statements, and even spoken with economists in Japan and Switzerland. The facts have been cross-checked against multiple sources.