Savings rates tend to rise slowly after a policy increase and fall promptly after a cut. The asymmetry follows from how banks fund themselves rather than from any direct link.
Deposit rates are set by the bank, not the central bank
A policy rate governs lending between banks. Nothing obliges a bank to pass a change to depositors, and the rate offered on an account is a commercial decision.
Banks weigh the cost of retaining deposits against the cost of raising funds elsewhere. If wholesale funding is cheap and deposits are stable, there is little pressure to pay more.
The link to policy is therefore indirect, running through funding needs rather than through any mechanical adjustment.
Deposit balances are unusually sticky
Most savers do not move money in response to modest rate differences. Switching requires effort, and balances left in place cost the bank nothing extra to retain.
That stickiness means a bank can lag the market without losing significant funding, at least for a period. Only sustained gaps prompt visible outflows.
Cuts face no such constraint, because reducing a rate does not require anyone to be persuaded of anything.
New money is priced differently from existing money
Banks frequently compete through accounts open only to new customers or new deposits, which raises the rate paid on incoming funds without repricing the entire book.
Existing balances in older products can sit at much lower rates indefinitely, since those products are closed and no longer marketed.
The headline rate advertised therefore describes what is available to a mover rather than what most balances currently earn.
Term deposits price expectations
Fixed-term accounts reflect where rates are expected to go over the term rather than where they are now. A term rate below the current variable rate implies expected cuts.
This is why a fixed term can look unattractive at exactly the moment it is most valuable, and attractive when rates are near a peak.
The trade is access. Locking funds away removes flexibility, and early withdrawal terms vary considerably between products.
What this implies for a saver
Rates on held balances drift downward relative to the market unless they are checked. The gap grows quietly because nothing notifies the account holder.
Reviewing the rate actually being received, rather than the rate the provider advertises, is the step that closes it.
Protection limits, access terms and the treatment of interest differ between products and jurisdictions, so those details belong in the comparison alongside the rate.