Interest rates of zero occur when the inflation rate is the same as the interest rate. The two rates will be the same, so if you lend money to someone and are paid back a year later with interest, you do not actually make any money by lending them money. This happens because the rates change together. When a country goes into recession, the central banks lower their nominal rates. They do this to get people to lend money more, but if they do it too quickly inflation occurs. Negative interest rates also happen when it's believe that the currency will rise in the future.