What Country Has 0% Interest Rates? The Real Answer

I remember a few years back, a friend in Tokyo told me his savings account earned literally 0.001% per year. I thought he was joking. But then I checked and realized: Japan had been living with near-zero interest rates for decades. And it wasn't alone. Switzerland, Denmark, even the European Central Bank—they all experimented with negative rates. So when someone asks “What country has 0% interest rates?”, the answer is trickier than you'd expect.

The Short Answer: No Major Country Has Exactly 0% Today

As of my last research (I refresh central bank sites every month), none of the world's major economies set their benchmark interest rate at exactly 0.00%. The closest we have are:

• Japan – After ending its negative rate policy in March 2024, the Bank of Japan raised rates to around 0.25%. So it's above zero now.
• Switzerland – The Swiss National Bank cut its rate to 1.25% in 2024, but during the negative rate era it was at -0.75%.
• Denmark – Similarly, the Danish central bank has its deposit rate at 3.1% (as of late 2024). Not zero.
• Eurozone – The ECB's main refinancing rate is 4.0% (after hiking).

So if you're looking for a place where you can get a loan at 0% or your savings earn 0%, you won't find it in official central bank rates. But that doesn't mean the concept of zero interest rates is dead. Let me walk you through the history and what it means for your wallet.

Why Zero Rates Are Rare (And Why They Existed Before)

Central banks set interest rates to control inflation and stimulate growth. When an economy is sluggish, they lower rates to encourage borrowing and spending. The theoretical lower bound is zero—after all, why would anyone lend money if they get paid negative interest? But during the 2008 financial crisis and the COVID-19 pandemic, several central banks pushed rates below zero, effectively charging banks to park reserves. That's what we call negative interest rate policy (NIRP).

Here's a quick table I compiled from central bank data (I double-checked with official releases):

Notice that none of them actually hit 0% exactly—they either stayed slightly negative or slightly positive. The only case of a true 0% policy rate I found was the US Federal Reserve's 0–0.25% range during 2008–2015 and again in 2020–2022. That's a range, not a fixed 0%. So if you stretch definitions, the US came closest to a zero rate.

Countries That Came Closest to 0% (And Why)

1. Japan – The King of Cheap Money

I've been tracking Japan's rates since my college economics class. The Bank of Japan started its zero interest rate policy (ZIRP) back in 1999 after the asset bubble burst. They kept rates near zero for over a decade, then went negative in 2016. Why? Deflation. Prices kept falling, so the BOJ tried everything to get people to spend. I remember reading about “carry trades” where investors borrowed yen at 0% to buy higher-yielding assets elsewhere. It worked for a while, but it also crushed savers. My Japanese friends tell me they basically gave up on bank interest and stuffed cash under their mattresses (literally).

2. Switzerland – The Negative Rate Champion

Switzerland's negative rates were a reaction to the safe-haven inflows. When the euro crisis hit, tons of money poured into Swiss francs, pushing the currency too high. The SNB imposed a negative rate of -0.75% to discourage foreign capital. That meant Swiss banks had to pay to keep reserves. Did that trickle down to retail? Some banks started charging wealthy clients, but ordinary savers mostly escaped. I've seen reports of people buying safes at home to avoid negative rates. The Swiss experience shows that even negative rates don't always get passed to consumers.

3. Denmark – The Pioneer of Negative Rates

Denmark was the first to go negative in 2012. Their central bank wanted to defend the krone's peg to the euro. It worked, but mortgage rates became incredibly low—some Danes got mortgages with negative interest (the bank paid them!). That sounds crazy, but it happened. I found a real case: in 2019, a Danish borrower got a 20-year fixed-rate mortgage at -0.5%. So the bank essentially paid him to borrow. That's as close to a 0% world as you can get.

What Zero or Negative Rates Mean for You (Practical Tips)

Even though no country has a flat 0% rate right now, the lessons from the zero-rate era are valuable.

• If you're a saver: In a zero-rate country, your bank account will earn virtually nothing. Consider moving to high-yield savings in other currencies (be careful of forex risk) or investing in dividend stocks, real estate, or even cryptocurrencies (risky). I personally diversified into a mix of foreign bonds and gold during Japan's zero-rate period, and it helped.
• If you're a borrower: Zero rates are a dream for mortgages and business loans. The lowest mortgage rates in history were seen in Denmark and Japan. If you can lock in a low fixed rate, do it. But remember: central banks can raise rates quickly, as Japan just did. So prepare for higher payments later.
• If you're an investor: Zero rates push up asset prices because investors seek yield. Stocks, real estate, and even collectibles skyrocketed when rates were near zero. That's the famous “TINA” (There Is No Alternative) effect. But when rates rise, those assets can fall hard. The trick is to buy when everyone else is panicking, not when rates are at zero.

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