When policy rates fall, savings accounts reprice within weeks. When policy rates rise, the same accounts often take much longer to follow. The asymmetry is deliberate.
A deposit is a source of funding, not a service
Banks take deposits to fund lending, and the rate paid is the price of that funding. It is set against alternatives such as wholesale borrowing rather than against policy directly.
If a bank already holds more deposits than its lending requires, raising rates buys funding it does not need and reduces the margin on money it already has.
The decision is therefore about the bank's own balance sheet position. Policy rates set the backdrop but do not oblige any particular response.
Most savers do not move their money
Switching accounts requires effort, and the gain on a modest balance over a few months is small enough that many people never begin.
Banks measure this stickiness closely and know approximately what share of balances will leave for a given rate gap. Below that threshold, paying more simply costs money.
The reluctance is rational on both sides, which is why the gap between the best available rates and the average paid can persist for years.
Cuts pass through faster because incentives align
Reducing the rate paid on deposits improves margin immediately and requires no competitive justification, since every other bank faces the same policy change at the same time.
Savers have nowhere obviously better to move to, because the alternatives have fallen as well. The competitive pressure that slows increases is absent during cuts.
The result is that the pass-through to savers is close to complete on the way down and partial on the way up.
Competition concentrates in visible products
Banks that do want deposits usually compete through a small number of headline products rather than by raising rates across all existing accounts.
A separate online brand, a fixed-term account or a limited introductory offer attracts new money without repricing the large stock of balances already held.
This segmentation is the main reason two accounts at the same institution can pay materially different rates for functionally identical deposits.
Where the pressure eventually comes from
Money market funds and short-dated government securities track policy rates closely and require no relationship with a bank. As the gap widens, balances migrate towards them.
Once that migration becomes large enough to threaten funding, banks respond, which is why deposit rates tend to catch up in steps rather than smoothly.
The practical consequence for a saver is that the rate on an untouched account drifts steadily away from what is available elsewhere unless it is periodically checked.