The title explains it all. Instead of earning interest on your money you lose a set percentage of your money annually even if you met minimum deposit requirements in a negative interest rate environment. You are paying the bank to protect your money as your money would be better off under the mattress. However, the benefit is lower interest rates for your car purchases, home purchases, and other large purchases. And for a more academic definition allow me to quote Investopedia:
"A negative interest rate policy (NIRP) is an unconventional monetary policy tool whereby nominal target interest rates are set with a negative value, below the theoretical lower bound of zero percent.
BREAKING DOWN 'Negative Interest Rate Policy (NIRP)'
During deflationary periods, people and businesses hoard money instead of spending and investing. The result is a collapse in aggregate demand which leads to prices falling even farther, a slowdown or halt in real production and output, and an increase in unemployment. A loose or expansionary monetary policy is usually employed to deal with such economic stagnation. However, if deflationary forces are strong enough, simply cutting the central bank's interest rate to zero may not be sufficient to stimulate borrowing and lending.
A negative interest rate means the central bank and perhaps private banks will charge negative interest: instead of receiving money on deposits, depositors must pay regularly to keep their money with the bank. This is intended to incentivize banks to lend money more freely and businesses and individuals to invest, lend, and spend money rather than pay a fee to keep it safe."
( http://www.investopedia.com/terms/n/negative-interest-rate-policy-nirp.asp#ixzz3odwxEnS4 )
